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Full text of "Speeches on the public expenditure of the Dominion"











IGtbrarg 

KINGSTON, ONTARIO 











SPEECHES 



Public Expenditure of the Dominion, 



HON. D. L. MACPHEKSON, 

SENATOR OF CANADA. 



DELIVERED IN THE SENATE, OTTAWA, DURING THE 

SESSION OF 1877. 



"With Introductory Reflections, addressed to his former 

Constituents, the Electors of North Simcoe, 

Grey and Bruce. 



" The situation of this country is alarming: enough to rouse the 
" attention of every man who pretends to a concern for the 
" country's welfare."— Junius. 



TORONTO : 

Williams, Sleeth & MacMillan, Printers, 124 Bay Street. 

1877. 



TO THE ELECTORS 



Counties of North Simcoe, Grey and Bruce, 



CONSTITUTING FORMERLY 



THE ELECTORAL DIVISION OF SAUGEEN 



Gentlemen, 

At the request of members of both Houses of Parliament, I am induced 
to publish, in pamphlet form, the speeches delivered by me in the Senate 
during last Session upon the state of the Dominion, and especially upon the 
increase of that portion of the public expenditure which is largely within the 
control of the Administration. 

I was appointed to the Senate at Confederation in consequence of being 
then your representative in the Legislative Council of United Canada. I 
have, therefore, always felt that it was to you — to the trust you reposed in me — 
that I am indebted for a seat in the highest Legislative Body of the Dominion. 
I continue to entertain a warm regard for your welfare, and to be ever ready 
to do all in my power to promote your interests. 

Under these circumstances it seems to me fitting that I should address to 
you, and through you to the people of the Dominion, some reflections intro- 
ductory to those speeches. 

I may premise that I have eschewed partizanship in Parliament. I have 
discharged what I considered the duty of a Member of the Upper House — 
namely, to support or oppose measures as I believed them to be for the 
advantage or otherwise of the country, regardless of the Government under 
whose auspices they were submitted to Parliament. I laid down this rule for 
my guidance when I first entered Parliament as your representative, and I 
am not conscious of having departed from it in any instance. 

I welcomed the change of Government in 1873. I entertained great 
respect for Mr. Mackenzie. I looked upon him as a man of marvellous 
merit, whose rise was creditable, not only to himself, but also to the institu. 
tions of our country. I placed full faith in his truthfulness. I belie /ed in the 
sincerity of all he had said against political corruption during the many years he 






4 INTRODUCTORY REFLECTIONS. 

was in Opposition. I believed economy to be, with him, an instinct. I felt 
persuaded that any Government, of which Mr. Mackenzie was the head, would 
be distinguished for political purity and financial economy ; and it was with 
satisfaction I saw him succeed to power at a time when the country was about 
to enter upon the construction of great public works, involving enormous 
expenditure j confident that, with his practical knowledge, in addition to 
the other and higher qualities he possessed, he would take no step without 
due deliberation, and, especially, would not commit the country to engage- 
ments inconsistent with its perfect financial safety, or which would require the 
imposition of new taxes upon the people. 

With respect to Mr. Blake, for a long time I looked upon him as one from 
whom Canada had much to hope. He had inherited a name and station ; was 
endowed with talents of a very high order ; he had had the opportunity of culti- 
vating those talents, aided by the highest educational advantages, and his studies 
were guided as were those of few men in this country. He stepped, it may be 
said, at one stride, from the law-student's desk to a high place in the first rank 
of his profession, and then rapidly rose to distinction and fortune. He entered 
public life while still a young man, and displayed rare aptitude for its work. 
He professed the loftiest and purest patriotism. His denunciations of political 
corruption, especially of anything savouring of Coalition, (which he stigmatized 
as corruption in its most obnoxious form,) are among the most eloquent utter- 
ances ever delivered in Canada. Self-seeking and meanness he denounced 
with withering scorn. Who could doubt that Canada had much to hope from 
so highly gifted a son ? Mr. Blake entered public life when many of the 
active public men of the day — who have since passed away — were descending 
in the vale of years. I confess that I placed implicit trust in all Mr. Blake's 
early professions — I believe, even now, they were made, at the time, in all 
sincerity. I cannot imagine, circumstanced as he was, that he could have any 
motive for entering the Government, other than a pure desire to serve his 
country. 

It is true there were incidents connected with the overthrow of the 
Government of the late honest Sandfield Macdonald, that surprised and 
startled the observing and thinking among the friends and admirers of Mr. 
Blake. His share in that episode was, however, forgotten, and he retained 
the high place he had won with the general public. 

When Mr. Mackenzie and Mr. Blake became the leaders in the Govern- 
ment of the Dominion — although some of the means by which they attained 
power were of a character that can never receive the approval of honourable 
men, but will be regarded as more and more unfortunate as time carries 
us away further from the events — still, I say, when Mr. Mackenzie and 
Mr. Blake became the leaders of the new Government in 1873, the feeling 
in the country was almost universal that their administration would be con- 
ducted upon the principles of political purity, departmental retrenchment, and 
financial prudence, which they had for so many years persistently and 
eloquently professed. 



POLITICAL. 5 

I shared in this opinion, and they had my independent support, until I 
became satisfied that they were violating the pledges of purity, reform ;md 
economy which, when in opposition, they had given to the people. 

Canada is difficult to govern. Tne variety of races and creeds, the newly 
formed union of Provinces formerly separate and independent, the want 
of homogeneity, unavoidable in a new country, where many of the inhabitants 
are immigrants of comparatively recent arrival, are among the most apparent 
sources of difficulty in the administration of affairs, and much allowance 
should be made for the Government. 

I made great allowance for the Government of Mr. Mackenzie. 
I could not but regret the early retirement from the Cabinet of some 
of its ablest members, to occupy high and permanent offices. I know it is 
difficult, under our institutions, to avoid such incidents, but it is disappointing 
to see men who have devoted many years to entreating the people to give them 
an opportunity to govern better, if not to save, the country, -soon after 
v such opportunity is afforded them, retiring to permanent office ; useful and 
high office, no doubt, but for which other men might have been found equal, 
while ripe statesmen are always scarce. When Mr. Dorion retired it was of 
course impossible to replace him in the Cabinet with a statesman of equal 
experience, from the Province of Quebec. 

Mr. Blake, after a brief period of retirement, rejoined the Government, 
assuming the portfolio of Minister of Justice ; and eventually Mr. Cauchon 
became the colleague of Messrs. Mackenzie and Blake. From that time the 
Government has been properly known as the Mackenzie-Cauchon Coalition. 

I believe the formation of this Coalition was the most severe blow ever 
inflicted upon the moral sense of the people of this Dominion, and especially 
of Ontario ; for not only was Mr. Cauchon known to them as one whose 
introduction into the Government rendered it unquestionably what they had 
been taught by Messrs. Mackenzie and Blake to abhor — a Coalition — but 
Mr. Cauchon, politically and personally, had been held up to public exe- 
cration by the organs of the present Government. I shall not enquire 
whether this was deserved, but I may say without fear of successful contra- 
diction — even if he is as black as he was painted by his present friends — that, 
compared with others of Messrs. Mackenzie and Blake's colleagues, Mr. 
Cauchon is in intellect a giant and in virtue immaculate. 
/ If Mr. Blake's professions were sincere in the past, his intimate association 
with some of those who are his present colleagues, must be to him a very 
1 abyss of political degradation. And why has he allowed himself to be thus 
dragged down ? Mr. Blake's prestige in the country four years ago was so great, 
and his services in the Government so indispensable to his party — as they are 
still — that Mr. Mackenzie and he could have demanded the support of their 
followers in the fulfilment of their life-long pledges. He should have said, in 
effect, to the self-seeking and unscrupulous, in words of burning eloquence 
such as I cannot command : — " Mr. Mackenzie and myself are true men. 
" We intend, in governing this country, to redeem the pledges we gave to the 



6 INTRODUCTORY REFLECTIONS. 

" people, and of which you were the witnesses. Unless you will support us 
| "in doing 'this we shall resign the reins of Government to other hands, but 
" we shall retain our self-respect and the respect of all right-thinking men, 
" and without these we should indeed be abject, and could render our country 
" but poor and halting service." 

Can it be doubted, had he addressed in this spirit, and in the manner 
of which he is so accomplished a master, the great majority which was 
returned to the House of Commons to support the Government, that that 
majority would have rallied to the support of their leaders ? If there be 
any doubt, where is the patriotism and political morality of the party in 
power ? 

In the intimate association that must necessarily subsist among the mem- 
bers of a party carrying on the Government, it is impossible that a few, or 
even one, can for any length of time remain better or purer than the others. 
One of two things must occur if they continue in association : either the 
unselfish, the patriotic, the pure, if but one, will leaven the mass, lift it 
up and place it on a level with himself, or the mass will draw him down to 
their own level. 

The latter unfortunately appears to have been the fate of Messrs. Mac- 
kenzie and Blake. It is to be deplored, in the interests of the country, 
that they should have been guilty of political recreancy. They have struck a 
blow at the purity of public life and at the morale of the whole Commonwealth 
from which it cannot recover during the present generation. In their 
case, as in all like cases, the first downward step was irretrievable and fatal * 
their subsequent descent, until they landed in the disgraceful scandals of 
the session just closed, was rapid. 

Mr. Mackenzie's political tergiversation is matter for profound regret, indi- 
cating as it does a disregard for solemn pledges on the part of one of 
\ the loudest professors of political purity which the country has produced. 
It was begun, too, at a time, I may say, when he revelled in the plenitude of 
power, receiving the support of the people and their representatives with an 
unanimity never before enjoyed by a Prime Minister of Canada. Mr. 
Mackenzie, therefore, cannot urge in extenuation of his backsliding even the 
poor plea of weakness. 

Mr. Blake was looked upon as the young Bayard among the public men 
of Canada, to whom office would be a burden only to be undertaken 
and endured for the opportunities it would afford him of serving his country, 
and to be relinquished the moment it became a question between office 
on the one hand, and consistency, self-respect and honor on the other. 
It was supposed that his only ambition was to serve his country and 
merit the approval and confidence of his countrymen. Mr. Blake's high 
character and known independence gave him the power, had he chosen to 
exercise it, not only to frown down all incipient self-seeking and meanness 
among the greedy of his supporters, but to prevent, or at least stop when 
discovered, flagrant and scandalous violations of the Independence of 



POLITICAL. 7 

Parliament Act. Such violations were charged in some cases against leading 
members of his party, and in connection with the other cases the Govern- 
ment itself is more seriously compromised than any non-official member of 
Parliament, as in all cases of real turpitude the Government was necessarily 
a party. But Mr. Blake did not so exercise his power. 

Had such scandals as were brought to light last session been establish- 
ed four or five years ago — that the Speaker of the House of Commons, the 
arbiter in that House between the Government and the Opposition, on 
whose impartiality the minority is dependent for justice and fair play, the 
guardian of the rights and privileges of the Commons — had it, I say, 
been established four or five years ago that the Speaker had been for four 
sessions of Parliament a Government contractor, and, in that capacity, 
had received large sums of public money in violation of the Independence 
of Parliament Act, would not Mr. Blake have made the country resound, 
and very properly, with his fervid eloquence in denunciation of so brazen and - 
corrupt a scandal ? 

When it was discovered that the Speaker of the House of Commons and 
many members of Parliament were involved in these scandals, what said 
Mr. Blake? No word of condemnation fell from his lips. How could 
Messrs. Blake and Mackenzie condemn that in which they as members of the 
Government were participators ? It need not, however, surprise Mr. Blake if, 
in the niinds of those who mark his silence now, doubts arise of the sincerity 
of his lofty-toned, but unjust and cruel, diatribes in 187 1 against Colonel 
Gray, then of New Brunswick. 

The scandals revealed last session were the grossest ever committed in Cana- 
da — I do not except the Pacific Railway Scandal or any other. I need not tell 
you that I am no defender of what was done with respect to the Pacific Railway 
contract in 1873. It is well known, however, to every man who has been a 
Member of Parliament, or a candidate, as well as to every elector in the coun- 
try, that spending money at elections in those days was regarded as a pardon- , (^, 
able act of illegality. But, I ask, would any one think of comparing in enormity 
such expenditure with the scandals unearthed last session? Consider the 
culminating scene in the House of Commons on the last day of the session. 
The Committee of Privileges and Elections deciding that the Speaker had 
been a Government contractor, had therefore vacated his seat, and reporting 
their decision to the House — but the Government preventing the considera- 
tion of the report by its presentation being so timed as to be simultaneous 
with the summons of the Governor-General to the Prorogation. 

The House of Commons which by a discreditable manoeuvre thus burked 
the consideration of a report that told the world its Speaker had been paid 
by the Government nearly Twenty Thousand Dollars, in violation of the 
Independence of Parliament Act, and therefore had no right to the seat 
he occupied, was the same House which only a fortnight before had 
adopted the report of a Committee calling upon Sir John Macdonald 
to pay back Six Thousand Six Hundred Dollars that he had spent in 



8 INTRODUCTORY REFLECTIONS. 

the public service. Was not this a rare and humbling exhibition of strain- 
ing at a gnat and swallowing a camel ? 

The Government were not only necessarily active participators in these 
scandals, but, by the course they pursued in burking the inquiry and otherwise, 
they compelled all their supporters in Parliament to become morally partici- 
pators with them. 

When Messrs. Mackenzie and Blake, who for so long a time professed to 
keep vigilant watch over the people's money, who arrogated to themselves 
the places of Tribunes of the people, — when they proved not only 
faithless to their pledges generally, but participators in political offences 
of the heinous character brought to light last session, it became the duty 
of every man who was in any position to do it, to call attention to them 
and point out that those offences were in their nature more debasing, and in 
their evil tendencies more wide spreading, than any previously known to 
this country. 

It is painful to me to write in these terms of the Government of our 
country, and especially of Messrs. Mackenzie and Blake, two gentlemen for 
whom I had entertained great respect and in whose professions of political 
integrity I at one time placed confidence. It was not pleasant to dis- 
cover that I had been deceived by them, but so it was, and I declared it 
from my place in the Senate more than a year ago. Many were deceived as 
I was, and I know that what I am now proclaiming, as from the house-top, 
thousands are confessing at their firesides in friendly interchange of confi- 
dence with their neighbours. 

When men set themselves up as leaders of their fellow-men, basing their 
claims mainly upon their pretended higher political morality and purity, as 
Messrs. Mackenzie and Blake did, and when it is discovered that the chief 
difference between them and those they assailed was in the garment the 
assailers wore — the cloak of political hypocrisy — it becomes a duty to exhibit 
them to the people in their true character. 

Mr. Mackenzie and Mr. Blake took their stand, as it were, in the political 
market-places and thanked heaven that they were not like other men, especially 
not like that vile offender, Cauchon ; and when he came between the wind and 
their purity, they, with averted and upturned heads, went away, saying that 
his sins were " rank and smelt to heaven." But they are now the colleagues 
and bosom friends of Mr. Cauchon, and thus show that they are more guilty 
than he, by, at least, one sin, — the odious sin of hypocrisy. 

Again, we can picture them in the same market-places, beating their breasts 
and, with real eloquence, pouring out their expressions of gratitude that they 
were not only better than mankind in general, but especially better than that 
irreclaimable sinner, John A. Macdonald, who, in addition to habitually com- 
mitting all the sins forbidden by the Decalogue, was a " Political Coalitionist," 
an offence for which, according to their code, there was no pardon. 

Now, look at their own Government — a Coalition ! Yes, the most hetero- 
geneous and unprincipled Coalition that ever existed in this country, chiefly 



POLITICAL. 9 

composed of men who were brought together, and are kept together, by no 
higher principle than selfishness, the salaries and perquisites of office. 

When they were struggling for office, £ir Francis Hincks, in debate, described 
their party as "an organized hypocrisy," and it would be difficult to characterize 
it more appropriately and truthfully. After having been so deceived, will the 
people ever again place confidence in the asseverations of professors of politi- 
cal purity ? 

Now that I have shewn that these gentlemen have utterly repudiated and 
thrown to the winds all their professions and pledges of political purity, let us 
endeavour to discover what they have done as statesmen and administrators. 
Their only attempt at what may be called high statesmanship was the 
negociations in 1874 and 1875 with British Columbia, and no Canadian can 
read the Orders in Council and despatches of his Government upon those 
occasions without a blush. 

' What can be said for them as mere administrators ? They succeeded to 
power under most advantageous circumstances for themselves. Their triumph 
at the polls was unprecedented. In Parliament their measures were not only 
unopposed, but almost uncriticized, so overwhelming was their majority, so- 
beaten and dispirited was the Opposition. They came into office, after 
twenty years' discipline in Opposition, proclaiming during that whole period 
that they had a policy, the introduction of which would be of incalculable 
advantage to the country. If they had had a policy, they certainly had a 
favourable opportunity of introducing it. 

The Dominion, in all its Provinces, has now for some years been suffering 
from commercial depression and financial stringency, unexampled in severity 
in the memory of the active men of to-day. These have gone on increasing 
in intensity, aggravated by the failure of the crops of last year, until now,,it 
may be said, that the sound chiefly heard in our streets is the voice of com- 
plaining. The farmers, in many parts even of our favoured Province of 
Ontario, have been compelled to import large quantities of corn for 
provender, and in some districts even wheat for bread. The aggregate 
amount of money borrowed by them, and secured by mortgages on their 
homesteads, during the last nine or ten months, is undoubtedly larger 
than was ever before borrowed by them in the same space of time. The 
manufactories of the country are unprofitable or closed ; the lumberman is- 
either selling his lumber at a loss or holding it to sell, perhaps, at a still 
greater loss ; the country merchant, unable to collect his debts, is, in turn, 
unable to pay the wholesale merchant, and, with deplorable frequency, both 
are launched into insolvency. . 

It may be said that Loan Societies and Official Assignees are the 
only classes who are at present doing a prosperous business. Such has 
been the universal and great shrinkage in the value of property of every 
description that there is scarcely a man in the country who is not poorer 
to-day than he was a year ago. The Government, unfortunately, has 
evidence of the truth of this in the Department of Public Finance, that trusty 



10 INTRODUCTORY REFLECTIONS. 

barometer of the prosperity of the people. Four, five, and six years ago, the 
annual revenue invariably exceeded the most sanguine estimates of the then 
Ministers of Finance ; now the revenue falls below the most cautiously pre- 
pared estimates. Governments cannot increase in riches so long as the 
governed are growing poorer. This is a truism which our Government would 
do well to lay to heart. 

The circumstances of the people are not such at present as to render the 
prospect of increased taxation agreeable ; but we shall have to bear increased 
taxation. The largely augmented expenditure of the present Government, 
continued in the face of a diminishing revenue frcm the ordinary indirect 
sources, must, I apprehend, render direct taxation an inevitable and early 
necessity. This is a matter that affects you closely, for if direct taxation has 
to be resorted to, a land tax will in all probability be one of its features.* 

Now, while the country has been suffering as I have described — and no one 
can say that the picture is overdrawn — several sessions of Parliament have 
been held, each at a cost to the people of this Dominion of about Six 
Hundred Thousand dollars. And what has Parliament done, or attempted 
to do, to revive the languishing, the almost extinct industries of the country, or 
to alleviate the existing depression, or even to inspire the desponding with a 
ray of hope ? It has done nothing, and attempted nothing. On the contrary, 
the Government declared that it was not in the power nor was it the function 
of the Government or of Parliament to alleviate by legislation the widespread 
suffering, and said, substantially, that the depression had been produced 
by overtrading, and could only be relieved by a wholesome contraction of 
trade. 

Is it then to be admitted that free and constitutional Governments have it not 
in their power to do aught to advance the interests of the countries they govern? 
Is there no science in statesmanship ? Are Cabinet Ministers only Cashiers 
to receive and disburse the Revenue, and Officers of the law to preserve the 
peace ? If these are their only duties, our Ministers are too many in number 
and vastly over-paid. These lower functions are all that our Government pro- 
fess to discharge, but I think there are much higher ones which they might 
exercise with signal advantage to the country ; but they must see these latter 
ones before they can exercise them. 

If, in the opinion of the Government, Parliament could not, by legislation, 
do anything calculated ,to revive the prosperity of the country, what did it give 
to the people, during its last session of nearly three months, in exchange for 
Six Hundred Thousand Dollars of their money? Few Acts of importance 
were passed, and the country would not have been much, if at all, the loser if 
it had had to wait for most of these for some years to come. 

The power and ingenuity of the Government seem to have been exhausted 

* If direct taxation could be made to bear equitably upon the whole people of a country 
it would be the most economical and best mode of raising revenue, but political economists 
have not yet devised a system of direct taxation at once equitable and practicable. 



POLITICAL. 11 

in efforts to injure the character of Sir John Macdonald. This appears 
to have been the only policy of last session. I can discover trace of no 
other. True, it was not ennobling to the actors nor calculated to benefit 
the country or exalt its name at home or abroad. Happily for the credit of 
Canada, these efforts failed in their object. 

Much of the time of the Committee of Public Accounts of the House of 
Commons was spent in what I think may be called the trial of Sir John 
Macdonald. The Minister of Justice did not think it unworthy of his 
high office to rise in that Committee (two-thirds, at least, of the members 
of which were his political supporters, ready to accept his reading of the law), 
and to arraign and examine Sir John Macdonald, his predecessor in office, 
for having misappropriated or spent without proper authority Six Thousand 
Six Hundred Dollars of the Secret Service Fund. 

The whole proceeding was a cruel indignity offered to that gentleman. 
His pursuers should have remembered that he had been a Minister of Canada 
for a quarter of a century, trusted by the people with the whole destinies of 
the country, — destinies which he had guided with great success, the people en- 
joying unexampled prosperity, every intelligent and industrious man growing 
richer and richer year by year, while it is well known that Sir John Macdonald 
left the public service a poorer man than he entered it. 

It is also known that the emoluments received by Cabinet Ministers now 
are about one-half larger than were received by them during his time, except 
for the last few months of his public service. 

I desire to refer to another matter, one in which my own name came up. 
During last summer a Royal Commission was issued, ostensibly to enquire 
into the affairs of the Northern Railway Company (strange to say, after Parlia- 
ment had commuted the debt owing by the Company), but, apparently, 
mainly for the purpose of endeavouring to show that sums of money, in all 
Two Thousand Five Hundred Dollars, subscribed by individual Directors of 
that Company to a Testimonial to Sir John Macdonald (of which I was 
Treasurer), and paid for them, by the Company, could be made to appear by 
legal sophistry to belong to the Government. 

This inquiry was followed up by a Committee of the House of Commons, 
before which it was established that the Testimonial (set on foot when he was 
supposed to be on his death-bed) was for the benefit of his wife and family, 
and that Sir John did not know who any of the contributors were. 

The object of the Government in all this must have been to manifest osten- 
tatiously their jealous care, faithful guardianship, and sleepless watchfulness 
of the people's money. If a scrupulous care of the people's money had 
characterized their administration of public affairs through all its ramifications, 
we might admire their stern consistency, and their fidelity to their pledges 
of retrenchment and economy. 

To assist you in determining whether their administration has been gov- 
erned by a proper consideration for the means and resources of the country, 
— by that consideration which their pledges entitled the .people to expect, — I 



12 INTRODUCTORY REFLECTIONS. 

will submit to you a few facts in respect to their management of some of 
the Public Works, beginning with the 

PACIFIC RAILWAY. 

The course of the Government with respect to this great undertaking has been 
extraordinary and unfortunate. They do not seem to have been governed 
by any settled policy or plan, and without these they rushed into large expen- 
diture, and committed the country to heavy engagements. They began, not 
by constructing any part of the main line, but by giving Mr. A. B. Foster a 
contract for what they called the Georgian Bay Branch of the Pacific Railway. 
They did this without first surveying the country through which this Branch 
line was to run, and therefore without an estimate of its cost, or even 
knowing whether the undertaking could be carried out. When explored, 
a great part of the country was found to be a barren wilderness, impracti- 
cable within any reasonable cost for a Railway, on the line and of the 
curves and gradients specified in the contract. The project had to be 
suspended, the contract cancelled, and One Hundred and Nine Thousand 
dollars were paid to Mr. Foster, for which, so far as I can discover, the country 
got very little value.* Why this Branch should have been placed under 
contract so hastily and recklessly, requires a fuller explanation than Mr. Mac- 
kenzie has yet given. One thing is certain, the interests of the Dominion did 
not call for and were not consulted in this transaction. 

Then, with respect to the Main Line, the Government saw fit to commence it 
on the section between Thunder Bay — or rather between Fort William on the 
bank of the Kaministiquia, six or eight miles from Thunder Bay, on Lake 
Superior — and the Red River, a distance of 410 miles, through a wil- 
derness, no part of which, worth mentioning, according to the testimony of 
Mr. Sandford Fleming, Chief Engineer of the Railway, is fit for settlement. 
Mr. Fleming's evidence upon the subject is in full accord with that of all 
other persons who have visited the region. It abounds in small lakes, quag- 
mires and rock. Through a considerable part of the country the construction 
of the Railway will be difficult and costly, there being much rock cutting and 
some tunnelling. When finished it will only be a summer road, open for five 
months in the year, and run at enormous loss to the country. Long before 
it is finished the American line from Duluth to Pembina, on the frontier of 
Manitoba, is certain to be completed, and will be open via St. Paul all the 
year round. 

* This item of One Hundred and Nine Thousand Dollars stands in the Public Accounts, 
as stated above, but it was explained in Parliament that Forty-one Thousand Dollars was 
the amount paid to Mr. Foster on account of his contract for the Georgian Bay Branch, 
and that the balance, Sixty-eight Thousand Dollars, was an advance made to him upon. 
Iron Rails, under his contract with the Canada Central Railway Company for building the 
line— subsidized by the Government — to connect the Georgian Bay Branch with the Canada 
Central Railway. These Iron Rails were valued at Forty-eight Dollars per ton and three- 
fourths thereof, or Thirty-six Dollars, per ton were advanced upon them. Steel Rails couldi 
have been bought deliverable this Spring at Montreal at Thirty-six Dollars per ton. 



FORT FRANCIS LOCK. 13 

The Pacific Railway is under contract from Fort William westwards 
to English River, a distance of 113 miles, and from Selkirk, on the Red 
River eastwards to Keewatin (Rat Portage) 114 miles, including the costly 
section, numbef fifteen. At Port Savanne, 73 miles west of Fort William, 
the Railway will connect by the Savanne River with the waters of Lac des 
Mille Lacs, and of other and smallei lakes, and through them with Rainy 
Lake and River, and the Lake of the Woods. 

It has been represented that the Railway will thus connect with and open 
for trade and commerce, upwards of 300 miles of water communication. 

You can judge of its value as an avenue for trade and commerce 
when I tell you that the difference in level between Lac des Mille Lacs and 
the Lake of the Woods is about four hundred and thirty feet, and is overcome 
by nine portages. The most inexperienced in such matters will at once see that 
it will be utterly impossible to transport merchandize over this route ; and yet 
this is the route the Government spoke of employing for transporting rails 
and other materials for the Pacific Railway from Port Savanne westerly. The 
Government does not appear to have known more of this country, when it 
plunged into heavy expenditure in it, than it did of the region through which 
it contracted for the building of the Georgian Bay Branch. 

The next wOrk upon which I will say a few words is 

FORT FRANCIS LOCK. 

When it was expected that the Pacific Railway would follow pretty closely 
the line of what is known as the Dawson route, that it would connect .at 
Sturgeon Falls with the waters of Rainy Lake and that the chief water 
stretches (Rainy Lake, Rainy River and the Lake of the Woods) would be 
utilized for many years as part of the communication to the North-West, I 
could understand the policy of constructing Locks at Fort Francis, as, with 
other improvements, they would make navigable in one " stretch" the dis- 
tance from Sturgeon Falls to the north-west angle of the Lake of the Woods, 
one hundred and seventy-seven (177) miles, and render unnecessary for a 
very long time the construction of about the same number of miles of costly 
Railway. But instead of carrying the Railway along the Dawson or Southern 
route, the Engineer deemed it better to locate it upon a line which removes 
it about one hundred (100) miles north of Fort Francis, so that the one under- 
taking has no possible connection with the other. Moreover the locating of 
the Railway on the level of Lac des Mille Lacs renders the utilization of the 
water stretches impossible, because it is separated from them by what is 
practically an insuperable natural obstacle — its altitude of four hundred (400) 
feet above Rainy Lake. 

The works at Fort Francis, like the Georgian Bay Branch, were under- 
taken without survey, and without estimate. They cost, up to the 20th 
December last, One Hundred and Eight Thousand Six Hundred and Seventy- 
four Dollars, and only a small proportion of the work is performed. 

How much has been expended since upon them, I have not the means 



14 INTRODUCTORY REFLECTIONS. 

of knowing, but when surveys and estimates have been obtained, it will 
be for the Government to determine whether to proceed with them, or dis- 
continue them and let the country lose the outlay, as in the case of the 
Georgian Bay Branch. Strange to say, the expenditure is charged against 
the Pacific Railway. 

If these works should be proceeded with, the country will be committed to a 
further large expenditure for the improvement of Rainy River. This river is 
the Boundary Line between the Dominion and the United States. It, there- 
fore, would seem but reasonable and just that expenditure made in improving 
this international communication should be shared by both countries in the 
proportions in which they are interested. Now that Canada is building a 
railway through that country, her interest in the improvement of those "water 
stretches " is very small. The inhabitants of Minnesota are the people who 
will be chiefly benefitted by the improvement of Rainy Lake and Rainy 
River, including the lock at Forfr Francis. I regard our expenditure there as 
unnecessary and indefensible. 

But surely the whole expenditure between Lake Superior and the Red 
River is premature and unwise ! That section of the Railway will cost not 
less than Twenty Millions of Dollars ; the interest will be One Million of 
Dollars a year, and with the loss on working the road (which I shall not 
venture to estimate) will amount to an enormous sum, to be borne by 
the tax-payers of this Dominion. I may say, my own opinion has always 
been that we should have been content, for a time, to use the United 
States lines for our all-rail-route to Manitoba, and begin our Pacific 
Railway at Pembina, thence to Winnipeg, and on through Manitoba 
and the North West, combining with its construction a comprehen- 
sive and attractive scheme of Immigration, under which Immigrants 
would be assured of employment and land, — employment first, and land 
afterwards. The lands retained by the Government in the North West, 
owing to the settlement of adjoining lands would have been enhanced in value, 
and their sale would have provided funds to aid in extending the railway as 
required without overburdening the Dominion Exchequer. In this way the 
Canadian Pacific Railway east of the Rocky Mountains could have been built 
as fast as required, for very little money, and our prairie country would have 
become quickly peopled. A similar course, as far as adaptable to British 
Columbia, might have been pursued in that Province ; and when the Govern- 
ment decided to build the road as a Public Work no reasonable objection 
could be urged against this policy. Had it been followed, the Dominion, from 
the Atlantic to the Pacific, would have been more prosperous than it is to-day. 
We should have been free from the heavy engagements that weigh upon us, 
and free also from the financial peril that stares us in the face — imminent 
if not inevitable. Our expenditure to this time upon the Railway would have 
been comparatively small, and would increase only as might be convenient, 
for it would be subject to our own control. 

As it is, the outlay in connection with the Pacific Railway to the 30th June.. 






FOKT WILLIAM ON THE KAMINISTIQUIA. 15 

1876, (according to the public accounts) amounts to the large sum of Six Mil- 
lions Two Hundred and Fifty-four Thousand Two Hundred and Eighty 
Dollars. This includes the sum of Fifty-one Thousand Four Hundred and 
Nineteen Dollars paid for the station ground at 

FORT WILLIAM ON THE KAMINISTIQUIA, 

being, exclusive of streets, about seventy-five acres of land of the town plot of 
Fort William (a paper town in the wilderness) which the Government bought 
from their political friends at the rate of about Six Hundred Dollars per acre ! 
Included in the sum of Fifty-one Thousand Four Hundred and Nineteen 
Dollars, is Five Thousand and Twenty-nine Dollars and Thirty-six Cents, paid 
by the Government for an unfinished building, said to have been intended for 
a hotel. 

I have seen no explanation of this transaction that justifies it or removes 
it from grave suspicion of jobbery. The subject was referred to a Committee 
of the Senate, but too near the close of the Session to permit the completion 
of the inquiry. The evidence of Mr. Fleming, Chief Engineer, and of Mr. 
Murdock, the locating Engineer at that point, was obtained. ' The former 
testified that the terminus was settled in conference with Mr. Mackenzie, 
that he (Mr. Fleming) was much surprised at the price paid for the 
land. Mr. Murdock .testified that he located the line under instructions 
from the Department of Public Works, notwithstanding he had recom- 
mended a point nearer to the mouth of the river for the terminus, where the 
facilities'would be greater and where a farm was offered for terminal grounds 
at $75 per acre. 

What is already known in connection with the selection of the terminus on 
the Kaministiquia renders a searching enquiry into the whole matter abso- 
lutely necessary. 

From all the information I have been able to obtain, my own opinion at 
present is, that this terminus of the Pacific Railway cannot permanently remain 
upon the ground which has been bought and paid for, but that it must 
be removed either nearer to the mouth of the Kaministiquia, or to Prince 
Arthur's Landing. 

It undoubtedly requires great vigilance on the part of the Government to 
protect the public interests when large expenditure is in progress, such as 
that upon the Pacific Railway survey, extending as it does across a great part 
of the continent, which, between Manitoba and British Columbia, is almost 
entirely uninhabited. Persons under the title of Purveyors are employed, 
who seem to traverse the whole country between Lake Superior and the 
Pacific Ocean, disbursing public money for every conceivable purpose. It 
may be a necessary but it certainly is an objectionable system, as efficient 
supervision or audit of the expenditure would seem impossible. The 
following large amounts were expended in this way during the fiscal year 
ending on the 30th June last : 



16 INTRODUCTORY REFLECTIONS. 

At Prince Arthur's Landing on the requisition of N. Bethune, 

Purveyor $158,891 50 

Paid in Manitoba by cheques drawn by Thos. Nixon, Purveyor. 194,537 45 
Paid in British Columbia by cheques drawn by J. Robson, 

Purveyor 322,888 98 

Then for account of St. Francis Lock there are disbursements 

by N. Bethune 14,212 53 

Same account, by John Logan 39,174 46 

Various supplies from other parties, chiefly in Toronto 23,142 35 

Purveyor Thomas Nixon is probably personally known to many of you who 
reside in the Township of Proton. 

These introductory observations have extended to much greater length .than 
I intended when I took up my pen, but I must not close them without allud- 
ing to that colossal blunder of the Government, the purchase years before 
they were wanted of 

FIFTY THOUSAND TONS OF STEEL RAILS. 

I think it will be admitted that Governments have no business to speculate 
with the public funds; that is, they have no right to spend the people's money 
before it is absolutely necessary to do so. It is no part of their duty to forecast 
the course of the markets for steel rails, or any other commodity, which the 
country. may want at some future day. The members of our Government are 
not supposed to have had special training for such work. If they had had 
they would not have bought 50,000 tons of steel rails in a falling market- 
when the rails were not required, and on the advice of persons interested in 
selling. Mr. Mackenzie says he acted on the advice of hardware merchants 
and agents of iron masters — the very men who were interested in making 
sales, especially in a falling market. 

Mr. Mackenzie also says he consulted Mr. Sandford Fleming, the Chief 
Engineer. Mr. Fleming has had great experience in his profession, but 
speculating in steel is not in the line of his profession, and I am sure Mr. 
Fleming does not pretend to have any skill in judging of the probable course 
of markets. 

It is two years and a half since the Steel Rails were bought ; no portion of 
them was required for the Pacific Railway until this summer, and only a 
small quantity will be wanted during this season. Had the Government not 
ordered these rails till last autumn, which was as early as they need have done, 
they could have contracted for the delivery of 50,000 tons at Montreal for 
One Million One Hundred and Thirty-eight Thousand Nine Hundred Dollars 
less than the country has paid for that quantity. 

But if the G3vernment had waited until last fall the order would not have 
been for 50,000 tons but for enough only, for one year's requirements — pro- 
bably 10,000 or 12,000 tons, at Thirty-six Dollars per ton, costing at 
Mantreal Four Hundred and Thirty-two Thousand Dollars, or say, deliv- 
ered at destination, Five Hundred Thousand Dollars. This is all that need 



STEEL RAILS. 17 

have been disbursed for steel rails, for the Pacific Railway, to the close of this 
year. But, instead of this amount, the Government has actually disbursed 
n cost, charges, and interest — upwards of Three Millions Five Hundred 
Thousand Dollars, being Three Millions and odd Dollars more than they need 
have disbursed, and which sum, now represented by piles of corroding steel 
rails, might have been and ought to have been still at the credit of the country 
with its bankers, where it would be convenient to have kq^ it at present. 

On a subsequent page will be found a statement of the transaction. It 
shows that the country, up to the 30th June last, had lost by it more than a 
Million and a Half of Dollars • and further payments have been made which 
were not included in the Public Accounts of last year. 

Is not this appalling ? Consider what might be accomplished in this country 
with One Million Five Hundred Thousand Dollars judiciously expended, and 
that of this lost sum, no less than One Million One Hundred and Twenty- 
three Thousand One Hundred and Fifty Dollars were paid away needlessly 
by the Government, to English ironmasters. 

The loss to this date is not limited to the amount shewn above. But in 
consequence of having the rails on hand, the Government despatched five 
thousand tons to Vancouver Island, without waiting to see whether the Bill to 
provide for the construction of the Esquimault and Namaimo Railway would 
pass. They would not have done this, had the rails not been on hand. The 
Bill did not pass. The rails are now lying on Vancouver Island corroding, 
and no man can say when they will be required. They represent in cost 
and freight not less than Three Hundred and Twenty Thousand Dollars. 

There is still another and a worse case. The rails sent to Vancouver Island, 
although deteriorating, are the property of the country ; but the Government 
has taken authority to make an absolute gift of about 4,000 tons of these rails 
to Nova Scotia for a private Company. When it was discovered that the Steel 
Rails would not be wanted for the Pacific Railway for years after they were 
purchased, about eleven thousand tons were sent to Halifax for use upon 
the Intercolonial and other Government Railways in the Maritime Provinces. 
One of these, the 

TRURO AND PICTOU RAILWAY, 

is about 52 miles long, connecting at Truro with the Intercolonial Railway, and 
at Pictou with the Gulf of St. Lawrence. To aid in extending Railway com- 
munication into the eastern part of Nova Scotia, the Government agreed to 
transfer the Truro and Pictou Line, by way of bonus, to any Company that 
would agree to continue it from a point near Pictou to the Strait of Can so, 
The negotiations were commenced in the time of the late and concluded by 
the present Government. 

In 1874 the House of Commons passed a resolution authorizing the 
Government to conclude the transaction, and an Act was passed last 
Session to give effect to it. When this Bill was passing through the 

B 



18 INTRODUCTORY REFLECTIONS. 

House of Commons, the House was not informed by the Govern- 
ment, as it ought to have been, that subsequent to the House's author- 
izing the transfer of this Railway, a very large sum of money- had been 
expended upon it. When the Bill came to the Senate, no communica- 
tion of this expenditure was made to that House. Attention was called to 
outlays amounting to Seventy-seven Thousand Three Hundred and Sixty- 
nine Dollars for new works at Pictou and elsewhere upon the line; surprise 
was expressed that they should have been incurred after the Governmen t 
had authority to transfer the Railway to a private Company. And this led 
to the astounding discovery that the Government had actually re-laid 42 
miles of the line with steel! which must have taken, including sidings, 
about 4,000 tons of rails. 

The excuse offered by the Government for this unauthorized, and, under 
the circumstances, extraordinary expenditure, was that the Railway had to be 
maintained, that the track was wearing out and had to be relaid. But does 
any one suppose that it would have been relaid with -steel had it not been for 
the unfortunate purchase of steel rails ? The Government had them on hand 
and were anxious to get them out of sight, and to help to do this actually 
gave away four thousand tons, which cost about Two Hundred and Twenty- 
five Thousand Dollars, to a private Company. 

The road had been open only a few years, and, considering its light traffic, 
the track cannot have been in very bad order. Whatever renewals were neces- 
sary should have been in iron rails, of which a large quantity was removed 
on the Intercolonial, to be replaced -by steel. The iron so removed was 
nominally lent, but I presume really given, to private Companies who are 
building Branch Railways to connect with the Intercolonial. If these iron 
rails are sufficiently good to lay upon new roads, surely they were good 
enough for repairing a Railway which was about to be given away. 

It was said by the Government when the Bill was before Parliament that the 
Railway had very little traffic, but certainly the expenditure upon it would lead 
one to suppose that the traffic must be considerable and increasing. After its 
transfer had been authorized the Government must have expended upon it 
for new works, relaying the track with Steel Rails, &c, Three Hundred and 
Twenty-five Thousand Dollars, — an addition to the gift contemplated by 
the House of Commons, wholly unauthorized. What can be said, not in 
justification, but in extenuation of thus giving away public property without 
the knowledge of Parliament ? 

The Government Steel Rail adventure in all its unfortunate phases, of 
which the Truro and Pictou is not the least remarkable, is so extra- 
ordinary — was embarked in so unnecessarily and unwisely, conducted so 
recklessly, if not corruptly, and has been so dire in its consequences to 
the country — that it would be altogether incredible were not the facts and 
results, as they are, absolutely demonstrated. 

The transactions which I have brought under your notice involve the abso- 
lute waste of Millions of the public money ; and the men who are directly 



FINANCIAL. 19 

responsible for this waste are the same men whom the people — placing con- 
fidence in their ability as statesmen and administrators, putting faith in the 
sincerity of their professions of purity and in their promises of retrenchment 
and economy — raised to supreme power, and to whose support in the House of 
Commons the people sent a majority so large as to render the sway of the Gov- 
ernment altogether unquestioned in the Dominion. Absolute power carries with 
it weighty responsibility. The present Government has wielded the power for 
nearly four years. How has it discharged the responsibility ? Traverse the 
Dominion from Cape Breton to Vancouver Island, and enquire how the 
Government has acquitted itself of its duties; and the answer, from supporter 
and opponent alike, will be an expression of disappointment — varying in em- 
phasis, of course, but always condemnatory. 

Four sessions of the present Parliament have been held, at a cost to the 
people of about Two and a Half Millions of Dollars. Throughout all this 
period the control of the Government has been absolute — its majority in the 
House of Commons being overwhelming, and the Senate not unfriendly. 

Whoever will search the Statute Books of these four sessions will find that 
the legislation of importance to the Dominion has been almost infinitesimal, 
and altogether incommensurate with its cost. 

I fear the Government will go on still increasing the expenditure, and that 
deficits will continue to roll up. Should the war now raging in Europe 
extend, money will certainly become dearer in England. I am not without 
apprehension that the construction of even the useful and most desirable of 
the public works in progress may have to be retarded, if not suspended, 
and will thus, although representing a large outlay, be for a time of no 
utility, because unfinished. In times like the present, even if managed 
with prudence, our finances would give cause for anxiety ; managed as they 
are, the future is pregnant with peril. In the Senate, I gave it as my opinion 
that Parliament should not rise without making better provision for the 
future. It would have been wiser to have provided foi the existing (deficit of 
Two Millions of Dollars than to wait until next session, when Parliament may 
have to deal with two deficits, each probably of Two Millions. 

I regret to have to write thus of our public affairs. But unless the facts 
are made known to the people, the evils will not be remedied, and there is a 
numerous and influential class of men throughout the country interested in 
concealing the truth and profiting by the evils which prevail. 

I wish that less of the work of exposing the mis-government of our rulers 
had devolved upon me; but I cannot look on in silence, and see the 
vital interests of the country compromised by those to whom its destinies 
are entrusted. I hold that every Member of Parliament is charged with 
the care of those interests, and that it is his imperative duty to give utter- 
ance to what he conscientiously believes is demanded in the public 
welfare. 

I am, as you all know, one of the non-official class, having nothing to gain 
by the rise and fall of Administrations; having no object to serve beyond that 



20 INTRODUCTORY REFLECTIONS. 

which I have in common with you and with every lover, as well as every tax- 
payer, of Canada ; — interested only in the good name and fair fame of our 
country; interested in the honest, efficient and economical administration of 
public affairs; and, above all, because essential to the attainment of the others, 
interested that our Ministers should be men worthy to constitute the Govern- 
ment of Canada — men of high character and consistency, men of truth and 
honour. 

To enable you to form a judgment for yourselves upon the increased 
amount of our expenditure, especially the controllable portion of it, I submit 
the facts to be found in the following pages, all of which have been extracted 
from official sources. I think you will agree with me that the exhibit is truly 
alarming — that the increase of our controllable expenditure is greatly in excess 
of the requirements of the public service, as well as far beyond the present 
means of our people. The increase of our public debt is also appalling, 
inasmuch as it is being incurred mainly for the construction of Works which 
will not only be unproductive, but the maintenance and working of which 
will be attended with heavy annual loss. 

I have brought under your notice evidence only of the larger acts of mal- 
administration and of the grosser cases of extravagance and worse than 
extravagance that have been brought to light. How much remains to be 
discovered time only can tell, and even time may not disclose all the 
evidence that exists of administrative incapacity, — of reckless extravagance — 
of absolute waste of the public money — of scandalous jobbery. The present 
Government have certainly made haste to impoverish the country and impair 
its credit, and, simultaneously, have made havoc with the reputations of its 
members, while their pretensions to statesmanship and political purity have 
been utterly swept away. 

Less than four years ago, Messrs. Mackenzie and Blake, as the leaders of 
the new Government, may be said to have unfurled their banner, and to have 
inscribed upon it 

REFORM, RETRENCHMENT, ECONOMY, PURITY ! 

It was borne over the Dominion in triumph, amid the acclamations of the 
people. Four short years have more than sufficed to prove the hollowness 
of these lofty pretensions. 

The proud inscription is effaced, and the banner itself is trailing in the 
dust. 

I have the honor to be, Gentlemen, 

Your very obedient Servant, 

D. L. MACPHERSON. 



WATER STRETCHES. 21 

P.S. — After the preceding pages were in type, I saw the official report of a 
debate on a motion of Mr. Kirkpatrick's, on the Fort Francis Lock. 
Mr. Mackenzie's speech on that occasion strikes me as being so extra- 
ordinary that I feel it my duty to bring it under your notice. 

On the 21st February last, {vide official report of the House of Com- 
mons) Mr. Mackenzie, said : — " It (the Pacific Railway) touches at present 
" west of the Lac des Mille Lacs, or rather, the Kaministiquia River (sic, 
" Savanne River ? ) at a navigable point, a little beyond which the 
" latter falls into the Lake. From that point there is almost continuous navi- 
" gation with a few short portages on the way to Rat Portage, the crossing place 
" of the Pacific Railway, on Winnipeg River, with only one great obstacle, which 
" could not be overcome in any other way, than by constructing a Lock at Fort 
" Francis. There are, as I stated roughly last night, two hundred and 
" twenty-eight miles under contract between Lake Superior and Red River, 
" of which one hundred and sixteen miles lie at the east end, or westward from 
" Fort William. At about seventy miles from thence, we reach a point east of 
11 Lac des Mille Lacs, thereby coming into the best navigable system at a 
" place much further west, than would have been obtainable if the first con- 
" templated line had been followed out." 

It would be difficult in the same space to compress more of erroneous and 
misleading statement concerning the country spoken of, but not described, 
than is contained in the foregoing extract from Mr. Mackenzie's speech. I 
have italicized its most important passages ; and unless it was intended to be 
meaningless, it foreshadowed enormous and useless expenditure. Mr. Mac- 
kenzie, judging by the report of his speech, made light of the " few short 
portages" between Lac des Mille Lacs and Rat Portage, — (Keewatin,) " the 
only one great obstacle" being at Fort Francis, which he said would be over- 
come by the construction of the Lock in progress at that point. Would the 
reader of Mr. Mackenzie's words suppose that the difference in level 
between the waters of Lac des Mille Lacs and of the Winnipeg River at 
Keewatin (Rat Portage) is no less than four hundred and thirty feet ? The 
Fort Francis Lock will only overcome twenty-two feet of this fall : four 
hundred feet of it lie between Lac des Mille Lacs and Rainy Lake, and are, 
at present, overcome by eight portages. Everything, therefore, that is trans- 
ported over this route must be transhipped twice at each of these eight 
portages, must be handled sixteen times between Lac des Mille Lacs and 
Rainy Lake. Imagine Steel Rails and other heavy materials for the Pacific 
Railway being thus transported — it cannot be done, and to speak of it as 
practicable is simply absurd. 

Mr. Mackenzie, you will observe, said that when the railway reaches Lac 
des Mille Lacs (Port Savanne) it will touch "the best navigable system " in 
that country. This is an inexplicable statement to fall from Mr. Mackenzie's 
lips. I shall not impute intentional mis-statement to our Prime Minister, 
but will assume (what is scarcely less unpardonable because equally mis- 
leading) that Mr. Mackenzie omitted to inform himself about the country 



22 INTRODUCTORY REFLECTIONS. 

which was the subject of debate on the 21st of February. His speech shows 
that while he professed to describe it with minuteness he was altogether 
unacquainted with its principal geographical features. 

Instead of speaking of Lac des Mille Lacs as part of the " best navigable 
system," broken only by "a few short portages," Mr. Mackenzie, to have been 
accurate, -should have described it as a Lake on the top of a hill, four hundred 
and thirty feet above the " navigable system" which he proposed to utilize. 

Mr. Mackenzie seems to regard this route as only temporary, for he 
proceeds to say : — " Those who choose to look at the map will observe that 
" the first line, which we hoped to take, went almost in a straight line from 
" Kaministiquia Bridge to a place called called Sturgeon Falls, this being at 
" the head of a long arm of Rainy Lake, stretching north-eastward. That 
" route was found not to be impracticable, but expensive. The line, as the 
" hon. gentleman says* was carried further to the northward, but two-thirds of 
" that country, perhaps, consists of water, and, in the vicinity of Rainy Lake, 
" the country, to the north in particular, is intersected by deep, wide channels, 
" which reach either the exact vicinity of the railway, or very near it, between 
" Rat Portage, the crossing of the Winnipeg River, and the end of the eastern 
" contract, a distance of one hundred and eighty miles — what we may call the 
" Central District of that region. No matter with what speed the road may be 
"prosecuted, that part cannot be completed within four or five years ; and in the 
" meantime, if this Lock is finished, as I am informed it will be, during the coming 
" season, we will be able to send out steamers to Rat Portage and to the eastern 
" end of Rainy Lake during the season after next, and from that point to Lac des 
" Mille Lacs is a comparatively short distance, so that in a few years we will be 
" able to avail ourselves of these most magnificent water stretches connecting the 
" two points which the railway would touch — east and west. The policy of the 
" Government from the first was to have the railway completed as straight as 
" possible, and in the meantime to utilize any portion of the water communi- 
" cations which would connect the two points that ought to be reached by railway 
" — years before they could actually be connected by rail. This is the cause why 
" it is of the utmost service to the Government in the construction of the railway 
" to have the means of passing through these waters in the way 1 have indicated, 
" especially with regard to the very av v and cumbrous carriage of rails and 
" materials of that kind, which are to be taken either from the west or the east. 
" The cost of the carriage of rails from Duluth to Red River is Fifteen 
" Dollars per ton, three times the amount of the cost of transporting them 
" from Montreal to Duluth. If the railway is finished to Lac des Mille Lacs, 
" and if the Government, when that time may come, should be directly 
" interested in carrying the other contract over the intermediate space to 
" which I have referred, we expect we could carry the rails at one half the 
" present cost in consequence of the completion of that undertaking, as the tran- 
" shipment would be very difficult and expensive over the small portages, and 
" particularly at Fort Francis, while I believe that to take the materials from 
" Red River eastwards would entail still more formidable expenditure. I make 



WATER STRETCHES. 23 

" these brief explanations in order that hon. gentlemen may see that we have at 
" all events reasons which were satisfactory to the Department and to the Gov 
" ernment for inducing us to come to the conclusion to prosecute this 
" work." 

Mr. Mackenzie thus clearly announced it to be the intention of the Gov- 
rnment to open unbroken navigation for steamers from Port Savanne (the 
railway station for Lac des Mille Lacs) to Rat Portage, on the Winnipeg River. 
He promised also to have it completed " in a few years," and " years before " 
the railway is finished between the points named. Can Mr. Mackenzie have 
been aware of the magnitude of the undertaking to which he committed 
himself ? 

Is it possible that he did not know that to connect Rainy Lake with 
Lac des Mille Lacs for the purposes of navigation, 400 feet, perpendicular, 
have to be overcome ? Did Mr. Mackenzie know that the work he spoke of 
accomplishing in a " few years " and " years before " the railway is completed 
between Port Savanne and Keewatin (Rat Portage) involved the construction 
of canals through seven miles or more of rock and the building of forty locks, 
each of ten feet lift ? 

When declaring it to be the policy of the Government to carry out this 
stupendous undertaking, surely it was Mr. Mackenzie's duty to tell the country 
how many millions it would cost to construct the canals and the forty locks 
required to enable "steamers" from Rainy Lake to ascend 400 feet to the top 
of the hill whereon Lac des Mille Lacs reposes. 

When the section of the Pacific Railway between Lake Superior and 
the Red River is finished the proposed system of navigation, if it should 
then exist, would be superseded by the Railway ■ and the tolls from traffic 
upon it would not, at any time, pay the wages of the keepers of its forty 
locks. Indeed, Mr. Mackenzie seemed to regard it only as auxiliary to the 
building of a section of the Railway, a means for transporting the heavy 
materials, — in short, to serve in the construction of the Railway as tempo- 
rary works are made to serve in the erection of bridges and important 
buildings. 

The Pacific Railway, even if constructed in the most judicious and economical 
manner, is a truly formidable undertaking for Canada ; but if it should be 
necessary, as auxiliary to its construction, to open up a system of artificial 
navigation so stupendous as that between Rainy Lake and Lac des Mille Lacs 
would be — carried out to correspond with the Fort Francis Locks, — then it 
is manifest that the construction of the Railway, even of the Lake Superior 
section, must be left to future generations. Mr. Mackenzie's project of navi- 
gation-improvement, in addition to the Railway through the wilderness, 
between Lake Superior and the Red River, is of course out of the question ; 
and when the facts connected with it are understood, the project — if ever 
entertained — must be abandoned. 

When, on the 21st February last, Mr. Mackenzie announced that the 
Government intended to adhere to the policy of utilizing for years the 



24 INTRODUCTORY REFLECTION'S. 

"water stretches" between Port Savanne and Rat Portage, did he know 
that in consequence of the Government having sanctioned the northern — 
the actual — location of the Railway, the utilization of the water stretches 
had been rendered- impossible except by an expenditure for Canals and 
Locks which, I am sure, Mr. Mackenzie would not advise ? Mr. Mackenzie 
seems not to have been aware of this fact on the 21st February. His 
speech throughout shows that he was at that time unacquainted with the 
topography of the country. Mr. Mackenzie spoke of the Fort Francis Portage as 
being the "only one great obstacle" to navigation between Lac des Mille Lacs 
and Keewatin (Rat Portage) on the Winnipeg River, and referred to the 
" few short portages" between Lac des Mille Lacs and Rainy Lake as trifling 
obstacles to be easily overcome — while, in point of fact, Fort Francis Portage 
compared with some of the others is an insignificant obstacle. At the latter 
point the fall is only 22 feet, while at Brule Portage, French Portage, Pine and 
Deux Rivieres Portages, the portage between Nequaquon andNameukan Lakes, 
the falls respectively are, 47, 99, 124 and 72 feet; and, as I have before 
stated, the total fall from Lac des Mille Lacs to Rainy Lake is four 
hundred (400) feet. (See table on next page.) Had the Railway been 
located so as to touch the waters of Rainy Lake at Sturgeon Falls 
the "water stretches" from that point to the north-west angle of the Lake 
of the Woods, a distance of 177 miles, or to Keewatin (Rat Portage), 
about 200 miles, could have been utilized, and the construction of what 
Mr. Mackenzie calls the "Central District" of the Lake Superior section of 
the Railway (180 miles) might have been postponed for very many years. 
But, located where it is, the water stretches cannot be taken advantage of, 
and the two end sections of the Railway which are now being constructed 
will be utterly useless for business until they are connected by the Central 
section — until the all-rail-line from Lake Superior to the Red River is com- 
pleted. The continued prosecution of the works at Fort Francis after the 
necessity for them had ceased, in consequence of that point being no longer 
on the line of through communication, goes to establish that Mr. Mackenzie 
was not aware that he had shunted the Railway a long distance aside 
from the water stretches, and had thereby defeated his own scheme — their 
utilization. I submit that I have put the only construction upon Mr. 
Mackenzie's speech of 21st February that is consistent with its having been 
spoken in good faith.* 

I think I have proved by Mr. Mackenzie's own words that at the time 
he sanctioned the location of the Railway he did not know the full con- 
sequences to the country of his decision. What is to be said of an Adminis- 
tration that decided a matter of such importance without the fullest 
comprehension of everything relating to it? Does not the action of the 

* The extent to -which Mr. Mackenzie's speech on the Railway and " water stretches '* 
was calculated to mislead the general public is exemplified in the fact that it seems to have 
misled even the Globe newspaper. All the inaccuracies of the speech were reproduced and 
endorsed in a leading article in the Globe of 7th May last, entitled "Fort Francis Lock." 



CONCLUSION. 



25 



Government in this case help to explain how works like the Fort Francis 

Lock, the Georgian Bay Branch Railway and the Steel Rail speculation, 

were entered upon apparently from mere impulse, without the deliberation 

which the public interests demanded, and without policy, plan, survey, or 

estimate ? 

D. L. M. 



Table of Distances and Levels between Lac des Mille Lacs, (Port Savanne) 

and Lake of the Woods. 

Compiled from the reports of S s J. Dawson, Esq.> C. E. 



PORTAGES AND RAPIDS. 



Baril Portage 

Brule Portage 

Descent in Windegoostegoon 
Lakelets and stream 



French Portage 

Pine and Deux Riviere Port- 
ages 

Island Portage and Fall, Stur- 
geon River 

Portage between Nequaquon 
Lake and Nemeukan Lake. 

Bare Portage 

Fort Francis 

Manitou Rapids 

Long Rapid 



Total, 



Land Carriage. 



Miles. Chains 



16 
21 



DO 



51 



Difference of Level between Lac des Mille 
Lacs and north-west angle of Lake of the 
Woods feet 



Difference in 
Level in feet 



*Rise 1.86 
Fall 47.02 

" 9.5o 
" 99-71 



124.12 
10.06 
32-5o 

72.00 

8.55 

22.88 

2.50 

4.00 



432.84 
Off 1.86 



430.98 



NAVIGABLE waters. 



Savanne River and Lac des 

Mille Lacs 

Baril Portage 

Baril Lake 

Windegoostegoon Lakes... 



Little French Lake 
Kaogassikok Lake.. 



and 



Sturgeon Lake and River 
Nequaquon Lake 



Nemeukan Lake 

Rainy Lake and River 

\ Rainy River and Lake of 



the Woods . . . 
Land Carriage. 



Total Miles 



Distance from North-west 
Angle to Keewatin about 
30 Miles. 



%% 
fc 



42 



15 

27 
17 

10 

46 

120 

304 



S IP IE IE o ih: 



ON THE INCREASED PUBLIC EXPENDITURE. DELIVERED IN THE SENATE, 

OTTAWA, ON MONDAY, APRIL l6TH, 1 87 7. 



In pursuance of notice given by me, I beg to call attention to the increased 
public expenditure of the Dominion, especially that portion of it which is 
largely within the control of the Administration, and to inquire of the Govern- 
ment how it is proposed to restore the equilibrium between income and expen- 
diture ? When I brought this matter before the Senate early in the session, 
I intended that that should be the only occasion this session on which I 
would trespass on the patience of the House on this subject. But as my 
statements were received with a simple denial of their correctness by the 
Government, and the friends of the Government, I felt called upon to go more 
thoroughly into the question of public expenditure than I had previously done 
— not to satisfy myself of the correctness of the figures I had produced, for 
I had done that before, but to bring conclusive proof of their accuracy before 
the Senate. 

But before entering on that branch of my subject, I shall say a few words 
upon a very important matter connected with our finances ; and if the state- 
ment to which I am about to refer can be substantiated it will be gratifying to 
me, and I am sure to the House also. The statement to which I refer will 
be found in the speech of the Prime Minister, delivered on the Budget, on 
the 20th February, 1877, on page 176 of the Hansard of the House of Com- 
mons. It is as follows : 

" I have shown that when they (the late Government) left office the ex- 
" penditure was at Twenty-four Million Dollars. When they entered office, 
" the expenditure stood at Thirteen Million Dollars, and in the course of six 
" years they increased the expenditure b'y Eleven Million Dollars. We have 
" been in office three years, and have decreased the expenditure by One 
" Million and a Half Dollars. That is the difference between the two 
" Governments. We have, moreover, made the most ample provision to 
" have all the public wants attended to. We have erected public 
" buildings in different places, the buildings at Montreal, Toronto, and 
" in this city having been almost entirely constructed during that period ; 
" and, further, we have effected the reduction of the estimates which were 
" left us when the hon. gentlemen opposite resigned office. This is a true 
" statement. Any one who chooses to examine the Public Accounts will 
u see for himself the real state of affairs." 



28 PUBLIC EXPENDITURE. 

I did examine the Public Accounts, and did not find Mr. Mackenzie's state- 
ment borne out by them; but, on the contrary, discovered several inaccuracies 
in it. The first is, that the public expenditure in 1873 was Twenty-four Mil 
lion Dollars, whereas it was only Twenty-three Millions, Three Hundred and 
Sixteen Thousand Three Hundred and Sixteen Dollars. The late Government 
left office on the 7th November, 1873, so tnat the present Government had the 
administration of affairs, as nearly as possible, for two-thirds of that financial 
year, and their predecessors for one-third. It would have been but fair if the 
Premier, also, in making his statement, had explained this. It would have 
been but fair to have compared the expenditure of the year preceding the last 
year of the late Government's incumbency of office, 1872-1873, with the year 
the hon. gentleman referred to — 1868. If he had done this, the expenditure 
for the year ending the 30th June, 1873, would have been found to be Nine- 
teen Million One Hundred and Seventy-four Thousand Six Hundred and 
Forty-seven Dollars, and for the year ending the 30th June, 1868, Thirteen 
Million Four Hundred and Eighty-six Thousand and Ninety-two Dollars — 
the difference between them being Five Million Six Hundred and Eighty- 
eight Thousand Five Hundred and Fifty-five Dollars. But even taking the 
next year— the year which he did take, and which I think was straining the 
comparison very far — there was a great inaccuracy, considering the lips from 
which it fell. For the year ending the 30th June, 1874, the expenditure was 
Twenty-three Million Three Hundred and Sixteen Thousand Three Hundred 
and Sixteen Dollars — being a difference between the expenditure of that year 
and of the year ending the 30th June, 1868, of Nine Millions Eight Hundred 
and Thirty Thousand Two Hundred and Twenty-four Dollars, instead of 
Eleven Millions Dollars, as the Premier had stated — an error of One Million 
One Hundred and Seventy Thousand Dollars. This was a very important 
inaccuracy in dealing with figures in a matter of this kind. It is true, we have 
of late got into the habit of dealing with large sums, but the hon. gentleman, 
in making a statement as the basis of an argument against his predecessors, 
ought to have been as nearly as possible accurate. The statement of the 
Premier was, therefore, unfair and unjust to his predecessors, and calculated 
also to mislead the country. The other inaccuracy in the statement of the 
Prime Minister was, that his Government, during the three years they had 
been in office, had reduced the expenditure by a Million and a Half of Dol- 
lars, and the hon. gentleman has referred to the Public Accounts, alleging 
that they sustain that statement. 

I have referred to the Public Accounts also, but they do not support the 
statement of the Prime Minister; on the contrary, the Public Accounts 
show that the expenditure has increased year by year since his accession to 
office. The expenditure of 1876 was larger than that of 1875.* 

In referring to the public expenditure the Premier ought to have been accu- 
rate. Such mis-statements as I am calling attention to led the people of the 
country to believe they were better off than they really are ; and that was not 
a worthy or proper thing for a Government to do. I hope the statement 
can be explained, for I can not doubt the errors were unintentional. In re- 
ferring to the expenditure of previous years, especially of 1868, the Prime 
Minister should have remembered that Confederation was only in its infancy 
then, that the foundations of the Dominion had to be laid, and a large ab- 
normal expenditure incurred. The Intercolonial Railway had to be under- 
taken and large amounts to be expended in the various Provinces. All this was 

* The estimates for 1878 are larger than those for 1877. I can discover no facts in the 
past or present to support the statement of the Prime Minister. 



PUBLIC EXPENDITUKE. 29 

perfectly indispensable. If the statement of the Prime Minister meant any- 
thing at all, he meant it to be understood that the burdens of the people had 
been reduced by his Government, in the three years they had been in office, 
by the sum of a Million and a Half of Dollars ; and yet this is not possible, 
for the estimates for next year are larger even than those for last year. It 
would not be worthy of the Prime Minister to say that he only meant that the 
expenditure from revenue upon the construction of certain public works was 
diminishing. Notwithstanding any reduction that might be made in ex- 
penditure upon Public Works from revenue, the interest upon the increasing 
expenditure from capital would still maintain the expenditure of the country, 
out of income, at its former or at a higher point. 

It would not be fair to the country to represent a mere transfer from one 
account to another as a real diminution of the burdens of the people, and 
unless the statement of the Prime Minister meant that there had been a 
positive diminution, it was misleading — not intentionally so, I feel sure, but 
necessarily misleading. So soon as the construction of certain buildings was 
finished, as a matter of course, the expenditure on them would stop, and un- 
less other buildings or works, to be paid for out of revenue, were com- 
menced, the expenditure under that head must decrease ; but it does not 
follow that an absolute reduction of the public expenditure would be the 
result. There might be a reduction under one head and an increase under 
another, a mere transfer from one column to another \ and I fear that that is 
the case at present. The Government has been engaged in the construction 
of public works, all very desirable of their kind, but in course of time they 
become finished, and unless the Government enter upon similar expenditures 
elsewhere, the outlay under that head must decrease \ but they are going on 
with a very large expenditure from capital, and the interest upon that is 
charged to the Consolidated Revenue Fund ; therefore, the gross expenditure 
of the country from income does not decrease, and I am afraid will in- 
crease very rapidly. The Prime Minister should remember that the Railway 
now building between the head of Lake Superior and the Red River would 
cost not less than Twenty Millions of Dollars ; the interest on that would be 
One Million a year in round figures, to say nothing of a heavy loss from 
working the railway. 

It had been asserted very confidently by the present Government that they 
had been committed by their predecessors to the large expenditure from 
revenue which was being carried on increasingly, and therefore that it was not 
within their control. I believe the contrary is susceptible of proof, and I 
will endeavor to throw some light on that subject. To do this I must take a 
retrospect of the financial affairs of the Dominion since 1870. It will be 
attended with some pleasure to review the prosperity the country enjoyed 
from 1870 to 1874, even if by contrast it make the present gloom seem 
darker than it otherwise would appear. I will first refer to the Budget speech 
of Sir Francis Hincks, delivered on the 7th April, 1870. Sir Francis said : 

" I believe the country is in a state of prosperity, perfectly able to meet 
" all its obligations, and there is no cause of complaint of excessive taxation." 
Sir Francis then proceeded to speak of the debt, per head, of the population : 
x< I find, sir, if we take Great Britain, that the debt of that country is about 
" One Hundred and Thirty-five Dollars per head of the population. The 
" debt of the United States is about Sixty Dollars per head. I may here 
" observe that although the ratio of debt is lower in the case of the United 
" States than that of Great Britain, it would be unfair to estimate the burdens 
" of the people according to the same ratio, for it is perfectly well known that 
-" the debt of England carries a very small rate of interest, while the debt of 



30 PUBLIC EXPENDITUKE. 

" the United States carries a large rate. Now, sir, while the debt of those 
" countries is what I have stated, the debt of Canada is about Twenty-two 
" Dollars and Fifty Cents per head of the population. Then, again, taxation 
" in Great Britain is at the rate of Ten Dollars per head, and in the United 
" States Nine Dollars and Twenty-five Cents, while in Canada it is only about 
" Three Dollars and Fifty Cents. I do not think, bearing these figures in 
" mind, that we need be afraid of any slight increase of taxation which it may 
" be necessary to impose upon the people, that there shall not be the least 
" cause to apprehend deficits in the future." 

Sir Francis proceeded to say the surplus on the transactions of the 
year ending June 30th, 1870, would be about One Million Dollars ; yet, not- 
withstanding the sound state in which the finances of the country then were, 
Sir Francis considered it prudent to increase the tariff five per cent, on the 
duty of fifteen per cent. I will next refer to the budget speech of Sir Francis 
Hincks in 187 1. In that year the finances of the country were in an exceed- 
ingly satisfactory condition. Sir Francis had estimated the surplus at One 
Million Eight Hundred and Ninety-two Thousand Dollars ; it actually 
amounted to Three Millions Seven Hundred and Twelve Thousand Four 
Hundred and Seventy -nine Dollars, for the financial year ending June 30th, 
187 1. I will also read the opinion of Sir Alexander Gait, — who was then not 
a supporter of the Administration, and who, while he made the following 
remarks, attacked several points of the Finance Minister's policy : — " With a 
" redundant revenue, and abundant means, and low taxation, nothing but 
" ordinary prudence and economy were necessary to insure the future pro- 
" gress of the country." 

On the same occasion Mr. Cartwright pointed out that people when in easy 
circumstances were very apt to make engagements which they would not other- 
wise make, and maintained there was great danger in such a course, and said : 
" A very considerable portion of our future surplus would be .taken up for 
" interest on the cost of the Intercolonial Railway, which he thought would 
" probably cost much more than was estimated. For all these reasons he 
" considered it a fit and proper time to warn the Government and the coun- 
" try of the possible results of the course they were now pursuing." 

As early as 187 1 the present Finance Minister foresaw the difficulties which 
have since overtaken us. He was among the first to predict the crisis, and 
he called attention to it every succeeding session until he became Finance 
Minister himself, when he seemed to regard but lightly the danger he had 
warned his predecessors against. Such was the state of the revenue that 
year (187 1) that Sir Francis modified the tariff by taking off the five per 
cent, imposed the previous session ; and, although he did not wish it and it 
was not a part of his policy, the duties upon agricultural products and coal 
were also taken off. At that time there was nothing said about the equili- 
brium between revenue and expenditure, the revenue greatly exceeding the 
expenditure. 

I now come to Sir Francis Hincks' Budget speech of 1872. Notwithstand- 
ing the repeal of the duties imposed in 1870, involving a loss to the revenue 
of Eight Hundred Thousand Dollars, there was a surplus of Three Million 
Seven Hundred and Twelve Thousand Four Hundred and Seventy-nine 
Dollars for the year ending the 30th June, 187 1. For the year ending 30th 
June, 1872, the surplus was estimated at Three Million One Hundred and 
Fifteen Thousand Four Hundred and Sixty-five Dollars ; the actual surplus 
was Three Million One Hundred and Twenty-five Thousand Three Hundred 
and Forty-five Dollars. Sir Francis Hincks estimated the surplus for the 
year ending 30th June, 1873, at One Million Dollars ; the actual surplus was 



PUBLIC EXPENDITURE. 31 

One Million Six Hundred and Thirty-eight Thousand Eight Hundred and 
Twenty-two Dollars. Those were unquestionably years of plenty; and it was 
at that time, and under the circumstances I describe, that the late Govern- 
ment recommended the construction of certain public works, such as piers, 
harbours, light-houses, marine-hospitals, custom-houses, post-offices, &c, to be 
paid for out of the surplus revenue. It will be admitted that the state of the 
revenue in those years was such as to justify this expenditure. 

I now come to the budget speech of Mr. Tilley, which contained a very 
interesting resume of the financial history of the Dominion. The duties on tea 
and coffee had been repealed in 1872, and the loss to the revenue from that 
source was One Million Two Hundred Thousand Dollars. Notwithstanding 
that, the surplus for the year ending the 30th June, 1873, was One Million 
Six Hundred and Thirty-eight Thousand Eight Hundred and Twenty-two 
Dollars. There was no additional taxation proposed that year. During the 
session of 1873 there were enactments passed which increased the expendi- 
ture of the country very considerably, and which it would not be fair to lay 
at the door of the present Government. These were increased subsidies to 
the Provinces resulting from the readjustment ol the Provincial debts ; 
expenses connected with the admission of Prince Edward Island to the 
Union, and increased salaries to the Civil servants. These, altogether, as 
estimated by Mr. Cartwright in his Budget speech of 1874, imposed on 
the country an additional burden of One Million Five Hundred 
Thousand Dollars. Mr. Tilley's estimates for that year, as introduced, 
amounted to Twenty Millions Nine Hundred and Forty-one Thousand One 
Hundred and Eighty-three Dollars. Then the legislation to which I have 
just referred was passed, and the expenditure for the year, under Acts of 
Parliament and by supplementary estimates, was authorized to be 
increased (according to Mr. Tilley) by the sum of One Million Five 
Hundred and Forty-two Thousand Dollars, makng the total estimates 
for that year Twenty-two Millions Four Hundred and Eighty-three 
Thousand One Hundred and Eighty-three Dollars. The Senate will thus 
see that the Government of that day provided for the additional expenditure 
ordered by Parliament in the session of 1873. Mr. Tilley evidently supposed 
he was making ample provision for all the requirements of the year ending 
30th June, 1874, including the increased statutory expenditure passed in 
the session of 1873. v The late Government went out of office on the 7th 
November, and Mr. Tilley was succeeded by the present Finance Minister. 
Mr. Cartwright, in his Budget speech of 1874, took a very gloomy view of the 
affairs and prospects' of the country, and his speech was replete with words of 
warning; but instead of decreasing the expenditure, as would have been reason- 
able and prudent, he increased it very largely. That was the first error, and a 
very grievous error it was, on the part of the Administration. They saw the 
impending crisis — it was then to some extent upon us — but they went on in- 
creasing the expenditure very largely. The Finance Minister had been 
warning the country ; he had put up storm signals in all directions for his 
predecessors ; but, notwithstanding all, he did not act upon the opinions he 
professed, and did not take the precautions which a prudent Minister should 
have adopted under the circumstances. The statutory increases were referred 
to by Mr. Tilley ; and honourable gentlemen will also observe that Mr. 
Tilley and Mr. Cartwright, the Finance " Ministers of the late and present 
Administrations, agreed substantially as to the amount of the statutory 
increase of expenditure in the session of 1873. This is very important. 
Mr. Tilley is reported to have said that, " notwithstanding the additional 
" charges imposed upon the revenue of the present year (1873), the surplus 



32 PUBLIC EXPENDITUKE. 

" would reach Seven Hundred Thousand Dollars. The surplus next year he 
" estimated at Nine Hundred and Thirteen Thousand Dollars ; but the 
" supplementary estimates and propositions before the House would require 
" One Million Five Hundred and Forty-two Thousand Dollars, which would 
" leave a deficiency of about Six Hundred and Twenty-eight Thousand 
" Dollars. But owing to the surplus in the present year no deficiency would 
" arise." That was the state in which Mr. Tilley left the finances of the 
country. The revenue balanced the expenditure, and he indicated clearly 
that there would be no deficit. But the moment the new Government 
came into office they appear to have largely increased the expenditure. In 
the following year Mr. Cartwright included Two Millions Four Hundred 
Thousand Two Hundred and Eighty-six Dollars in the schedule "A" of 
his Supply Bill. That might be called the Supplementary Supply Bill. 
Whoever was in the habit of looking at Supply Bills would be aware that they 
consisted of two schedules — " A" and " B," the former consisting of items 
for the current financial year which had not been voted in the preceding 
session. A schedule "A" was found in every Supply Bill, but there was 
no schedule " A" to compare in amount with that of 1874, Mr. Cartwright's 
first Supply Bill. In 1873 schedule "A" was Seven Hundred and Ninety- 
two Thousand Eight Hundred and Sixty-four Dollars, but in 1874 it was 
Two Millions Four Hundred Thousand Two Hundred and Eighty-six 
Dollars. 

Hon. Mr. Scott — To make up Mr. Tilley's deficiency. 

Hon. Mr. Macpherson — Mr. Tilley left no deficiency. Of this Two Mil- 
lions Four Hundred Thousand Two Hundred and Eighty-six Dollars the sum 
of Four Hundred and Twenty-five Thousand Dollars was on capital account, 
so that the items in schedule "A," charged against the revenue, amounted 
in round numbers to Two Millions. The Government desiring, apparently, 
and not unnaturally, to proceed with extensive works chargeable to income, 
wanted additional revenue and a larger surplus. To obtain these the Minis- 
ter of Finance increased the tariff from fifteen per cent, to seventeen and a 
half per cent., and in other respects made additions to taxation, which he 
estimated would add Three Millions of Dollars to the revenue. He may 
have been sanguine enough to hope that his additions would yield even a 
larger sum, probably Four Millions of Dollars; at all events he counted upon an 
increased revenue of Three Millions of Dollars, and upon that basis the Govern- 
ment appear to have pitched their scale of public expenditure. Hon. gentlemen 
know how disappointing the result had been. The new taxes, instead of 
coming up to the estimate of Three Millions, yielded only One Million Seven 
Hundred Thousand Dollars, not enough to meet the expenditure. It was 
then that the difficulties of the country began. It was then that the deficit 
commenced, which at the end of the last financial year — 30th of June last — 
amounted to Two Million Dollars, and is still increasing. 

The Minister of Finance, in his Budget Speech of 1874, laid the responsi- 
bility of the expenditure upon his predecessors, but I do not think the facts 
warranted his doing so. The expenditure from revenue under the control of 
an Administration pledged to retrenchment and economy, as the new Govern- 
ment was, and supported by an enormous majority, should have been 
retrenched. Some of the works might have been stopped, the expenditure 
upon others reduced, and a deficit avoided. But the Minister of Finance 
and the Prime Minister thought it best to proceed with the works in progress 
and also with new works, and so increase the expenditure as to produce the diffi- 
culties that now pressed upon the country. While doing this they endeavored to 
fasten the responsibility of their policy upon their predecessors. The present 



PUBLIC EXPENDITURE. 33 

Government would have been at a great loss if they had not had predecessors. 
Everything done which should not have been done, and everything left un- 
done which should have been done, they charged against those predecessors. 
When I hear the utterances of honorable gentlemen opposite, and read the 
speeches delivered in another place, I often wonder what would have been the 
result if those gentlemen had not had predecessors in office, or if they had been 
in office when Confederation was undertaken. 

But I need not speculate on the subject. Confederation, in that case, 
would never have been carried out. Mr. Cartwright's estimate of the revenue 
for 1874 was Twenty-five Millions ; it yielded only Twenty-four Millions, Six 
Hundred and Forty-eight Thousand, Seven Hundred and Fifteen Dollars, leaving 
a deficiency as compared with the estimate — the first since Confederation — of 
Three Hundred and Fifty One Thousand Dollars. Now, what the Finance Minis- 
ter should have done — because he could not plead ignorance of the state of the 
country— was to diminish the expenditure. The expenditure upon a great many " 
works could have been stopped, and the expenditure upon others diminished; 
and above all, new works should not have ^been commenced. I propose to 
show that a great many new and costly works were undertaken by the present 
Administration which were not thought of by their predecessors in 1873. But 
before doing so, I will quote from Sir John Rose's Budget Speech in 1869, to 
show what had been done by the late Administration when they were threat- 
ened with a deficit. Sir John Rose said : — 

" When the Government found the revenue was falling short, that 
" it did not come up to anticipation, that the receipts of one month 
" after another were below those of the corresponding month of the previous 
" year, they certainly felt that a very serious and difficult task might be entailed 
" upon them; for I believe, if there is any sentiment stronger than another in 
" the minds of the people in this country, as represented not only by support- 
" ers of the Government, but by honourable gentlemen on that side, it is that 
" we shall not permit any deficits to arise, but if the ordinary revenue falls short 
" of the expenditure, we must manfully look the difficulty in the face, and be 
" prepared, by exceptional taxation, if need be, to supplement the deficiency. 
" We cannot but feel it to be one of our first duties so to equalize the revenue 
" and expenditure that our credit abroad shall not be injured by its being supposed 
11 that we are willing to allow deficiencies to arise, without being ready to im- 
" pose upon ourselves a sufficient burden to meet them. * * * The 
" present Government would, however, be very recreant to its duty, if, strong 
" in the majority in this House, and strong, I believe, in the confidence which 
" the country reposes in us, we should permit it to go abroad that we would 
" allow a deficit to arise in any year, without being prepared for that year to 
" submit to the House such further measures of taxation, exceptional and 
" special, if need be, as would enable us to supply the void. I make these 
" remarks in order to show the House what were the considerations which 
" necessarily forced themselves on the attention of the Government, and the 
" conclusion to which they were driven, that any real deficiency must be sup- 
" plemented by fresh sources of revenue. They believed, indeed, that, no 
" matter who occupied the position, any body of men enjoying the confidence 
" of the people of this country would be prepared to propose such measures, 
" in the belief that they would be sustained by the House and the country. 
" But, while entertaining these views, the Government of course felt it their 
" duty to exhaust every means by which a deficiency could be avoided. They 
" saw month by month that the revenue was falling short, that there had been 
" excessive importations in previous years, and that these were being followed 
" by a corresponding contraction; and they felt it to be their duty, from the 

C 



34? PUBLIC EXPENDITUKE. 

" outset, at all events to* try whether by practising the most rigid economy it 
" was not possible to avoid the threatened deficit. The House will remember 
" the votes which were placed at the disposal of the Government last year; 
" and the results which are to be found in the statement I have just placed in 
" the hands of honorable members will show, I think, that wherever it was 
"possible to practise economy, wherever it was possible, without undue 
" damage to the public interest, to forego the performance of a service for 
" which provision had been made in the votes for the year, the Government 
" have endeavoured to do it. We contracted no new obligations — we entered 
" upon no new works — we did exactly as any individual would do who saw 
" that his income was falling short — we took stock, and determined that while 
" the public service should be efficiently performed, we would not incur any 
" new obligations with respect to public works which might be very much needed 
" and very desirable, but which, at all events, it was not for the interest of the 
" country to imdertake at a moment when the actual revenue would not enable us 
" to provide for them. It will be found by reference to that statement that in 
" every one of the items which were voted to us last year there is a saving in 
" the actual expenditure, as compared with the estimate — except only in the 
" interest on the public debt, which is augmented by reason of our having 
" borrowed half of the Intercolonial loan. On every one of the other items of 
" expenditure there is a saving on the charges of management of the public 
« debt — premium and discount, civil government, administration of justice, 
" police, penitentiaries, legislation, marine hospital and mariners' fund, militia 
" and enrolled force, arts, agriculture and statistics, public works, ocean and 
" river steam service, light-houses and coast service. So, too, with the item of 
" fisheries, miscellaneous, collection of revenue, etc.; and the result is, that by 
" the exercise of economy — by forbearing to undertake new works, by cutting 
" down expenditure wherever we could cut it down — we show a balance in 
" favour of the year's operations of Two Hundred and Seventy Four Thousand, 
" and Thirty-one Dollars. (Hear, hear, and cheers.) Now, Sir, I wish to state that 
'• in arriving at this result, while exaggerating nothing, we have concealed 
" nothing. There has been no manipulation of accounts, no postponement of 
" payments." 

Sir John Rose saw the danger, and exercised the influence which a gentle- 
man charged with the finances and credit of the country should possess with 
his colleagues, and the result was, instead of a deficit, a surplus. The course 
pursued by the present Finance Minister seemed to have been the very oppo- 
site. It was surprising that a gentleman with so much force of character as 
the present Finance Minister should have failed to impress on his col- 
leagues his views and opinions of the depression impending when they 
succeeded to office. I can only account for it by supposing that the Fi- 
nance Minister took a more sanguine view of the revenue, after he had 
increased the taxation, than was justified by the result. No doubt he had a 
great deal to contend with. His colleagues desired to have handsome 
amounts placed at the disposal of their departments for expenditure. The 
Finance Minister had remarked in his Budget speech of 1874 : — 

"lam aware that some of my honourable friends think this enormous out- 
" lay need not be gone on with; but I desire to say that these public works 
" that are in process of construction must be completed in a short time. I 
" see no purpose to be served by 'cooking' our estimates and apparently re- 
" ducing the amount chargeable this year in order that it may be swollen the 
" next. My honourable friend (the Minister of Public Works) has preferred 
" — and I think he was perfectly right in so doing — to bring down those esti- 
" mates, to show the obligation placed on him by the action of the late 



PUBLIC EXPENDITURE. 35 

M Govefrnment. * * * I must again repeat that it would be in the last 
" degree unjust to my hon. friend the Minister of Public Works to hold him 
" responsible for this state of things,. or to ask him to stop works already com- 
" menced, and to put a reduced sum in the estimates ; but when the works 
" now engaged in are completed, which I expect will be the case in eighteen 
" months, a considerable saving will be effected in the annual expenditure, 
" though for this a considerable period of time is necessarily required. " 

Could there be anything more unbusiness-like or absurd ? Suppose a 
private individual entered upon some improvement of his property, under the 
impression that his income would enable him to complete it, but in a short time 
he found that his income was falling off, would he be wise to incur a debt to carry 
out his plans? Could anything be more imprudent? What is the use of a change 
of Government unless there can be a change of policy, unless to retrench and 
economise when necessary ? Engagements had been entered into by the late 
Government of a nature which could be suspended at any moment, yet they 
were proceeded with by the present Government recklessly, without any regard 
to the fact that the revenue upon which their execution depended was falling 
short month by month. Mr. Cartwright found the taxation which he had im- 
posed yielded only One Million, Seven Hundred Thousand Dollars, instead of the 
Three Millions which he had anticipated; but instead of decreasing expenditure 
he increased it, throwing all the responsibility on the shoulders of the late Ad- 
ministration. The present Government seems to be perfectly helpless. The 
only reform, or rather financial change, which they gave to the country was 
to increase taxation and to change surpluses into deficits. From Confederation 
to the time of the change of Government in 1873, tne amount of 
Eleven Millions One Hundred and Sixty Thousand Eight Hundred and 
Forty-four Dollars was expended out of surplus revenue in the construction of 
public works chargeable to capital. An Administration- with such a flowing 
revenue was surely justified in undertaking public works and paying for them 
out of the revenue ; but when the present Finance Minister anticipated a de- 
ficit, and stated so in his Budget speech, there was no excuse for continuing 
to expend money as lavishly as in the years of plenty. The Government has 
placed this country in an unfortunate position by the course it has pursued. 
There is a large deficit, and we are now paying the interest of our debt 
with borrowed money. A more unsound and perilous condition for any coun 
try to be placed in it is impossible to conceive. The taxation of the countrv 
has been seriously increased, yet the expenditure has been increased in a still 
greater ratio. In the Budget speech of 1876, Mr. Cartwright was still hopeful, 
as he had been from his accession to office — but less sanguine, on the whole • 
the hues are not exactly roseate, but they are still hopeful. Mr. Cartwright 
began then to excuse the present Government for not having retrenched 
as they were pledged to do. *He had to acknowledge the existence of a 
large deficit, but still blamed the late Government. In his Budget speech 
the Finance Minister estimated the revenue for the current year (1877) at 
Twenty-three Millions, Two Hundred and Fifty Thousand Dollars, and the 
expenditure at something less. It is usual, as the House is aware, for the 
Finance Minister, in his Budget speech, to revise the estimates of the preceding 
session, but Mr. Cartwright omitted to do this in his speech of February, 1877, 
though between seven and eight months of the current fiscal year had then 
elapsed. Parliament was, therefore, left in ignorance of his revised estimate 
of the revenue and expenditure, of whether in his opinion there was to be a 
deficit or a surplus at the end of the current financial year. The want of the 
official revised statement is a serious want, and, in fact, it is impossible to 
complete comparisons without it. I have obtained statements of the revenue 
up to the 10th of February, for the years 1876 and 1877. The revenue up to 



36 PUBLIC EXPENDITURE. 

the ioth of February, 1876, was Twelve Millions, Eight Hundred and Twenty 
Thousand, Eight Hundred and Seventy-five Dollars, and for the same period 
of the current year it was only Twelve Millions, Four Hundred and Ninety- 
four Thousand, Two Hundred and Seventy-nine Dollars, showing a falling off, 
as compared with the preceding year, of Three Hundred and Twenty-six 
Thousand, Five Hundred and Twenty-six Dollars. Mr. Cartwright had esti- 
mated the revenue from customs for the current year at Thirteen Millions, Five 
Hundred Thousand Dollars; up to the ioth of February it had only reached 
Seven Millions, and Eighty-two Thousand, Two Hundred and Twenty-seven 
Dollars, which was at a rate of about Eleven Millions, Five Hundred Thou- 
sand Dollars for the year, instead of Thirteen Millions, Five Hundred Thou- 
sand Dollars. It is quite true that the spring importations are coming in, and 
the duties upon them will increase the average revenue for the remaining 
months of the financial year very considerably, but whether they will in- 
crease it sufficiently to bring it up to Mr. Cartwright's estimate is very 
doubtful. Notwithstanding all that has been said about retrenchment and 
economy, the estimates for the ensuing year show an increase over those of 
the current year. The estimates for the current year — and that was without 
supplementary elements— amounted to Twenty-three Millions, Thirty-one 
Thousand, Six Hundred and Ninety-nine Dollars; for next year they 
amount to Twenty-three Millions, One Hundred and Sixty-seven Thousand, 
Six Hundred and Eighty-six Dollars — not a large increase, but they are ex- 
clusive of supplementary estimates also, which have yet to be brought down, 
and which I fear will be very considerable. It is, therefore, probable 
that we shall have to face a deficit for the ensuing year as well as for the 
current year. I will now turn to another branch of the subject, and show 
the extent and manner in which the controllable expenditure, has been 
increased since 1873. . I would not have gone into this again this session if 
it had not been for the way in which the Government and its friends treated 
the subject when I brought it before the Senate early in the session : — 

The hon. Senator opposite (Mr. MacMaster) then said " he thought the 
course followed by the hon. gentleman from Toronto (Mr. Macpherson) was 
unusual and unfair; that he had taken many members by surprise; and they 
could have met several points successfully had proper time been given them 
to prepare for the debate. The comparison instituted between 1873, and 
1875, and 1876, was entirely unfair and unreasonable. In the first place the 
late Government went out of office in November, 1873, and their successors 
were acting upon their estimates. He did not want it to be understood he 
was either defending or finding fault with any Government, but he liked to see 
what was fair. * * With regard to the increased expenditure in the de- 
partments, he knew that it was partly due to appointments made by the late 
Government. He knew large establishments in which parties were appointed 
who had nothing whatever to do, and if they had to work, were utterly 
incompetent to do it. * * * * * With regard to the 
matters alluded to, if time had been given to go into figures, and make fair 
comparison, it would not appear so unfavourable to this Government, as the 
honourable gentleman had sought to make the House believe. He con- 
curred in the opinion that it was absolutely necessary, in the present state of 
the country, for the Government and everyone to be as economical as 
possible, but it must be borne in mind the Dominion is pledged to build the 
Pacific Railway." 

Now, that was a very broad denial of my statement, and the honourable 
Senator should be in a position to-day to prove what he then said. There 
has been ample time since then to prepare a reply, if reply be possible. 



PUBLIC EXPENDITURE. 



37 



The honourable Senator, having denied the correctness of my statement, 
should have taken the earliest opportunity to show wherein it was inaccurate ; 
because, if inaccurate, it should be corrected. It is not desirable 
that an error in so important a matter should go uncorrected. But my state- 
ment contained no error, and no attempt has been made to disprove it. I 
will show that the denial of its correctness by the honourable Senator 
was unsupported by facts. 

I will now submit a statement of the details of increases of expenditure 
charged to consolidated revenue fund and largely within the control of the 
Government of the day, for 1875 and 1876 over 1873, an d of 1876 over 1875. 
In this comparative statement I exclude all items connected with the public 
debt — interest, management of the debt and sinking fund. I also exclude 
items that might not be considered fairly within the control of the Administra- 
tion, such as Militia ; and throughout these statements I will compare the 
last complete year of Sir John Macdonald's Administration, 1873, with Mr. 
Mackenzie's complete years of 1875 and 1876. 

The following Statement shows the Increases in Expenditure 
charged to consolidated revenue fund for 1875 and 
1876 over* 1873, and for 1876 over 1875, under the following 
heads, being items which are largely within the control of 
the Government. (Public Debt charges not included) 



Departments. 



Civil Government 

Administration of Justice 

Police and Penitentiaries 

Legislation 

Geological Survey , 

Arts, Agriculture, etc 

Immigration and Quarantine 

Marine Hospitals 

Pensions and Superannuations 

Ocean and River Steam Service 

Fisheries and Light-houses 

Inspection Insurance Co's. etc 

Subsidies to Provinces 

Public Works 

Miscellaneous : 

Indian Grants and Manitoba Surveys. 
Mounted Police (established 1874).. 
Boundary Surveys (begun 1874). . . . 

Customs and Excise 

Weights and Measures 

Public Works, Including Railways . . . 

Post Office 

Minor Revenues 



Increase 1875 


Increase 1876 


Increase 1876 


over 1873. 


over 1875. 


over 1873. 


$148,391 




$ 91,121 


9 8 ,439 


$ 46,686 


145,025 


71,682 




4,968 




54,957 


12,743 


29,199 


3,226 


3 2 ,425 




47,416 


. 9,488 


15,402 


83,075 


98,477 


10,871 


i»95° 


12,821 


38,721 


70,874 


109,598 




93,°57 


9°,339 


9,881 


97,19! 


75,778 




8,914 


8,032 


829,362 




768,956 


159,462 


191,866 


351,328 


18,229 


9i,537 


109,866 


131,513 


108,639 


212,549 


333,5 8 3 


35,935 


3 6 9,5 l8 


121,741 


12,364 


134,105 


142,457 


57,441 


199,898 


69,969 


29,816 


99,785 


633,388 




548,312 


452,995 


101,966 


554,96i 




3,iii 


2,778 



Increase of 1875 over 1873 $2,960,336 

Increase of 1876 over 1875 717,062 

Increase of 1876 over 1873 3,677,398 



38 PUBLIC EXPENDITURE. 

This statement shows that the expenditure of 1876 exceeded that of 1873 
by the large sum of $3,677,398; that the expenditure of 1875 exceeded that 
of 1873 by the sum of $2,960,336, while that of 1876 exceeded that of 1875 
by the sum of $717,062. These net increases are enormous — I say net 
increases, because all the decreases have been deducted. But I am not going 
to hold the Government responsible for the full amount of the increase of 
1876 over 1873 — $3,677,398 — for, as I have already shown, statutory in- 
creases of expenditure were made in 1873, an d provided for by Mr. 
Tilley. Mr. Cartwright stated this amount to be about $1,500,000. The 
increases fairly chargeable against the present Government are as 
follows : — 

Net increase of annual expenditure (largely within the 

control of the Administration) in 1876 over 1873. $3,677,398 

Less expenditure authorized by statute in session 
of .1873, viz: 

Increased subsidies to Provinces; increased allow- 
ance to the Civil Service ; item on account of 
expense connected with the admission of Prince \ $1,500,000 
Edward Island into the Confederation ($100,- 
000), and other statutory increases : stated by 
the present Minister of Finance, in his budget 
speech of 1874, at about $1,500,000 

I will allow for unforeseen increases from 1873 to 

1876, inclusive, say 377,39$ 

1.877,398 

Making the increased expenditure upon items largely 

within the control of the present Administration, 

in 1876 over 1873 1,800,000 

This sum capitalized at 5 per cent, would give Thirty- 
six Millions of Dollars. 

Increase in 1876 over 1875 717,062 

This sum capitalized at 5 per cent, would give Four- 
teen Millions, Three Hundred and Forty-one 
Thousand, Two Hundred and Forty Dollars.* 

I am particular in emphasizing the increase of 1876 over 1875, because there 
can be no question as to which Government is responsible for it. The 
present Government have a much larger responsibility than they wish to 
admit for the increased expenditure of the financial year ending 30th June, 
1874. I will now call attention to the expenditure on public works in each 
Province in the same years : — 



* Thus the increase by the present Administration in the controllable expenditure between 
1876 and 1873 (One Million Eight Hundred Thousand Dollars) is equal to interest at 5 per 
cent, on Thirty-six Million Dollars; and the annual burden on the people would be no greater, 
if instead of increasing the expenditure unnecessarily the Government had bor- 
rowed Thirty-six Millions of Dollars. Now, a small portion of this sum, if it had been 
borrowed and judiciously expended, would have done much to promote the prosperity of 
the country. The very increase of the controllable expenditure of 1876 over 1875 — Seven 
Hundred and Seventeen Thousand and Sixty-two Dollars is the interest at 5 per cent, on 
Fourteen Millions, Three Hundred and Forty-one Thousand, Two Hundred and Forty 
Dollars. 



PUBLIC EXPENDITURE. 



39 



Public Works charged to Consolidated Revenue Fund, showing 
the Expenditure in each Province. 



Works. 


1873. 


1875. 


1876. 


ONTARIO. 

Custom Houses, Post Offices, etc 

Marine Hospitals, Quarantine and Im- 
migration Stations 


$103,133 

2,012 

209,887 


$204,928 

2,464 
208,486 


$259,601 
2,000 


Penitentiaries, Barracks, etc 


58,962 


Harbours and Piers 


262,413 






Total Ontario 

QUEBEC. 

Custom Houses, Post Offices 


$3!5, 32 

$162,975 
11,083 

9,684 


$415,878 

$146,439 
16,767 

io,753 


$582,976 
$146,626 


Marine Hospitals 


12,695 
15,359 
28,373 


Penitentiaries, Barracks, etc 


Harbours and Piers 




Total Quebec '. . 


$183,742 

$28,392 
3,674 

28,000 


$173,959 

$83,105 
1,640 

56,376 


$203,053 
$ 29,324 


NEW BRUNSWICK. 

Custom Houses 


Marine Hospitals 


Penitentiaries , 


10,860 


Harbours and Piers 


92,609 


Total New Brunswick 


$60,066 

$11,429 
100,246 


$141,121 

$ 3,33o 
7,i78 

123,497 


$132,793 

$ 14,086 
8,200 


NOVA SCOTIA. 

Custom Houses, etc 


Marine Hospitals 


Penitentiaries 


1 1,000 


Harbours and Piers 


145,965 




Total Nova Scotia 


$111,675 
6,614 


$134,005 

$ 22,347 
2,978 
i,57i 


• 
$179,251 


BRITISH COLUMBIA. 

Custom Houses • 


Marine Hospitals 




Penitentiaries , 


78,114 




Total British Columbia 


$6,614 

$ 109 
6,742 


$26,896 

$27,503 

65,072 

$92,575 


$78,114 
$ 40,092 


MANITOBA. 

Custom House, Post Office 


Immigrant Shed 


Penitentiary, Barracks, etc 


102,563 




Total Manitoba 


$6,851 


$142,655 



40 



PUBLIC EXPENDITURE. 



Public Works charged to Consolidated Revenue Fund, showing the 
Expenditure in each Province. — (Continued.) 



Works. 



PRINCE EDWARD ISLAND. 

Harbours and Piers 

Public Buildings 



GENERAL ITEMS. 



Public Buildings, general account 

Canals, including surreys and inspection 

Improvements of rivers . . . 

Dredging and Dredge Vessels 

Telegraphs 

Lighthouse Repairs 

Slides and Booms 

Roads and Bridges 

Red River Route 

Arbitration and Awards 

Rents, Repairs, and Furniture 

Ottawa Buildings I . 

Sundries 



Total expenditure on Public Works 
paid out of Consolidated Fund 
in 1873.. 

Total expenditure on Public Works 
paid out of Consolidated Fund 
in 1875.. 

Total expenditure on Public Works 
paid out of Consolidated Fund 
in 1876 



i873- 



143^15 
18,140 
79,426 
9,044 
12,218 
47,621 

13,651 

210,974 

9,899 

134,345 
39,808 

*95,49 2 



$1,597,613 



1875. 



$5,829 



$ 14,773 

25,006 

62,737 

195,782 



20,986 

4,000 

176,659 

5,258 

188,324 

58^00 

15,287 



$1,757,075 



1876. 



$25,061 
3,574 



44,343 

40,255 

123,100 

4,000 

25,428 

88,298 
11,680 
169,127 
63,500 
3i,733 



$1,948,941 



The following table gives the 
Expenditure on Piers, Harbours and Breakwaters, for the same years. 



piers and harbours. 



1873- 



18*5. 



1876. 



Increase 

1876 over 

1875. 



Increase 

[876 over 

1873. 



Ontario 

Quebec 

New Brunswick 

Nova Scotia 

Prince Edward Island 



$ 

209,887 

9,684 

28,000 

100,246 



$ 
208,486 

io,753 

56,376 

123,497 



$ 
262,413 

28,373 
92,609 

145,965 
25,061 



53,927 
17,620 

36,233 
22,468 



$ 
52,526 
18,689 
64,609 
45,7i9 



Totals 347,817 399, 112 554,42i 

Increased Expenditure on Piers, Harbours and Break- 
waters in 1876 over 1875 $130,248 

Increase in Expenditure on Piers, Harbours and Break- 
waters in 1876 over 1873 (excluding P. E. Island) $181,543 



PUBLIC EXPENDITURE. 



41 



This is not the only expenditure under this head, and I am of opinion 
many works of the kind have been proceeded with for party rather than public 
considerations. There are three harbours on Lake Huron very near each 
other — Goderich, Bayfield, and Chantry Island — on which there has been 
very large expenditure. On Goderich harbour, in 1876, the enormous sum of 
One Hundred and Twenty-seven Thousand Dollars was expended, and 
I am told, very unfortunately expended. 

Hon. Mr. Scott said the contract was given out by the late Administration. 

Hon. Mr. Macpherson — I do not care what Administration gave it 
out, the work was under the supervision of the present Government. 

Hon. Mr. Campbell — The contractor's name is McEwen, and he is a friend 
of the present Administration. 

Hon. Mr. Macpherson — In addition to Goderich, Forty-one Thousand 
Six Hundred and Twenty-four Dollars was expended last year on 
Chantry Island, and Eighteen Thousand Nine Hundred and Thirty-eight 
Dollars on Bayfield, which was only distant about twelve miles from Goderich. 

Hon. Mr. Scott said Chantry Island as well as Goderich Harbour improve- 
ments had been commenced by the late Administration. The contracts were 
given out the last year they were in office, and the work had been going on 
ever since. 

Hon. Mr. Macpherson — It is the expenditure I complain of; and the 
amount of new expenditures, upon works of this class, commenced under the 
auspices ot the present Government, will be seen by the following 

Statement of Expenditure charged to Consolidated Revenue Fund 
in 1875 and i ^7^, for works not commenced in 1874, viz: — on 
Piers, Harbours, River Works, Custom Houses, Penitentiaries, 
Marine Hospitals, &c. :— 



Works. 



Owen Sound 

Bayfield 

Port Stanley 

Port Hope 

Toronto 

Point du Chene 

Shippegan 

Tignish 

Souris 

Port Albert 

Shannonville . . . 

Kingston 

Picton 

Coteau 

Bathurst 

Tynemouth 

Tracadie 

Port Medway. . . 

Sissiboo 

Plympton 

Port Darlington. 

Port Burwell 

Oshawa 



1875. 



1876. 



3,74o 
i>9i7 
31 
6,945 
1,019 

7,35i 
16 
2,010 
5,829 
6,000 
2,992 
4,407 
6,000 
1,603 
3,876 
2,500 
6,690 

4,5i3 
2,500 
1,200 



Carried forward I 71,139 



$ 5,5oo 
18,398 

4,732' 
14,372 
2,824 
7,228 
6,312 
4,557 



5,ooo 
3,422 

5,ooo 



77,345 



42 



PUBLIC EXPENDITURE. 



Works. 



. Brought forward 

Bagotville 

Malbie 

Eboulements, extension of breakwater .... 

Riviere Blanche 

Baie des Chaleurs 

Campobello 

Jordan Bay 

Trout Cove 

Margaree 

Harbourville 

Broad Cove : 

Margaretville 

Oyster Pond 

Michaud and Mark Points 

Cranberry Head . 

Church Point 

Saulierville 

New London 

Coville Bay 

St. John, N.B., Custom House 

Montreal 

Montreal Examining Warehouse 

Chatham and Newcastle Custom House. . . 

London Post Office 

Lifting barge, for removing chains, &c . . . . 

Work Napanee River 

Work Detroit River 

Increase of General Work on River Im 

provements over 1874 

Toronto Immigration Station 

Quebec Marine Hospital 

Yarmouth " 



1875. 



Sydney " 

St. Catharines " , 

Levis " 

Souris " 

Quebec Observatory 

Military School, Kingston 

Fortifications, Kingston , 

" Levis 

Penitentiary, Kingston 

" Maritime Provinces 

" Manitoba 

" British Columbia . . 

St. Vincent de Paul Penitentiary . 



Totals 

Add 1875 t0 l8 7 6 



1876. 



71,139 



5> io 3 



3,217 

3,426 

203 

1,393 

3,5oo 
25,000 



40,811 

475 
6,008 
6,180 

157 



i,798 



77,345 
2,000 
8,000 

7,5o° 
873 

3,000 
600 

17,465 

4,000 
3,000 
2,000 
3,000 
5,000 
2,000 

97 
2,000 
2,000 
2,000 

5°3 

20,000 

2,081 



$168,413 



Gross amount expended in 1875 and 1876, 
on works not commenced in 1874 ■ . 



12,211 
i,346 

18,329 



152 
6,998 
2,000 
2,003 
3,574 

55,659 

3,303 

15,357 

3,213 
21,860 

60,597 

78,114 

4,076 



$453,256 
168,413 



$621,669 



PUBLIC EXPENDITURE. 



43 



There can be no question as to which Government is responsible for this 
expenditure. The present Government is wholly responsible for it, and it was 
incurred in disregard of their pledges to retrench. 

The following shows the 
Expenditure — charged to Consolidated Revenue Fund — for Har- 
bours, Piers, Breakwaters, Canal Works, River Improvements, 
Slides and Booms, Bridges, Hospitals, Buildings, etc., in 1874, 
1875, and ^76, which were not commenced in 1873 : 



Works. 



Napanee 

Belleville ' 

Meaford 

Inverhuron 

Port Greville 

Breakwater Joggings 

Gaberous Bay 

Ports George and Williams . . 

Salmon River 

Chedabucto 

Green Cove 

Pictou Island 

Digby Pier 

Big Pond, Cape Breton 

Morden Pier 

Wilson Beach 

Dipper Harbour 

St. John, New Brunswick .... 

Hillsboro Pier 

Tracadie 

Big Tracadie 

Port Albert 

Tynemouth 

Port Stanley 

Collingwood 

Shannonville 

Picton Harbour 

Plympton 

Bathurst 

Sissiboo River 

Sackville 

Port Medway 

Souris, Prince Edward Island 

Cobourg 

Saguenay 

Baie St. Paul 

Cow Bay 

Owen Sound 

Bayfield 

Port Hope 



Carried forward $133,152 



1874. 



' 4,999 
10,000 

4,39 6 

1,000 

6,000 

10,000 

2,000 

3,5°° 
5,000 
5,000 
2,500 
2,000 
2,500 
2,000 
5,000 
1,000 
10,000 

3,5oo 
1,500 

6,000 



28,932 



203 

6,000 

122 

10,000 



1875. 



5,000 



6,690 

6,000 
2,500 

3i 
267 
2,992 
6,000 
1,200 
3,876 
2,500 
500 

4,5 J 3 

5,829 

15,861 



25,000 
3,74o 
i,9i7 
6,945 



$101,361 



1876. 



732 



23,403 
2,000 
8,000 

46,458 
5,5oo 

18,398 

14,372 



$122,863 



u 



PUBLIC EXPENDITURE. 



Works. 



Brought forward 

Jordan Bay 

Shippegan 

Port Burwell 

Port Darlington 

Toronto Harbour 

Oshawa 

Malbaie Pier 

Eboulements Extensions of Breakwater 

Riviere Blanche . . '. 

Point du Chene 

Campobello 

Baie des Chaleurs 

Margaree 

Bagotville 

Harbourville 

Trout Cove 

Broad Cove 

Margaretville 

Oyster Pond 

Cranberry Head 

Michaud and Mark Points 

Church Point 

Tignish 

Saulierville 

Colville Bay 

New London 

Canal Basin, Ottawa 

Lock, Culbute Rapids 

River St. John improvements 

River Detroit 

Richelieu River 

Fraser River 

Napanee River 

Bridge, Fort Garry 

Bridge, Portage du Fort 

Fenelon River 

Gatineau River 

Newcastle Dist. Works 

Petewawa River 

Telegraph Cable, British Columbia .... 

Hamilton Post Office 

Montreal Custom House 

Three Rivers 

St. John, New Brunswick 

Miscellaneous, Prince Edward Island . . 

Military School, Kingston 

Observatory, Quebec 

Carried forward 



[874. 



1 ZZ^S^ 



4,443 

38,388 

7,480 



2,967 
3,547 
3,°9° 
28,716 
1,000 
7,713 

9,295 

2,552 

69,000 



1875. 

101,361 

5,io3 
16 



1,019 



7,354 



2,010 



200 
21,119 

5,739 



9,044 
3,426 
3,217 

1,798 



3°9,343 



161,406 



PUBLIC EXPENDITURE. 



45 



NAMES OF WORKS. 


i8 7 4- 


1875. 


1876. 


Brought forward 

Marine Hospital, New Brunswick 

" Quebec 


3°9,343 
7,765 

136 

8,308 


161,406 

6,008 

6,180 

i57 

475 
29,320 


313,541 


" Yarmouth 




" Sydney 


6,995 

2,000 
2,003 
3,574 

78,114 
21,860 

6o,597 
4,076 

3,213 
8,000 


" St. Catharines 

" Levis 


" Souris 

Toronto Immigration Station 

Penitentiary, British Columbia 

" Maritime Provinces 

" Manitoba 


" St. Vincent du Paul 

" Kingston 

Government House, Fort Garry 

Barracks, Battle River 


" Fort Pelly 


33,966 

3,3°° 
15,357 


Fortifications, Kingston 


" Levis 




Total amount expended in 1874 upon 
works not commenced in 1873 .... 

Total amount expended in 1875 upon 
works not commenced in 1873 


$327,552 


$203,546 




Total amount expended in 1876 upon 

works not commenced in 1873 


$556,596 









The present Government is of course alone responsible for the expendi- 
ture upon works commenced in 1875 and 1876, as well as for that upon 
some of the works commenced in 1874. 



I now come to an important and interesting statement — " Public Works, 
Charges on Revenue," being chiefly for maintenance of the works, for the same 
years, namely, canals and improvements of Rivers, Railways, etc. In the case 
of the canals I have separated the salaries of the staff from the charge for labor 
for maintaining the works. It will be seen that the increase of expenditure 
in this direction has been large, but I will not trespass upon the patience of 
the Senate by dwelling upon it. The statement is as follows : — 



46 



PUBLIC EXPENDITURE. 



Expenditure upon Public Works, charges on Revenue, in 1873, 
1875, AND l8 76, viz., on Canals, Improvements of Rivers, Rail- 
Ways, &c. : 



Works. 



Welland Canal 

Lachine Canal 

Beauharnois 

Cornwall 

Williamsburg 

Burlington Bay 

Chambly 

Ottawa and Rideau 

Carillon and Grenville , 

St. Anne's Lock 

St. Our's Lock , 

St. Peter's Canal 

Miscellaneous 

Ottawa River Works , 

St. Maurice Works 

Saguenay Works 

Newcastle District Works .... 

Sundries 

Inspection of Canals 

Piers below Quebec 

Agent and Contingencies B. C. 



Totals , 



:873- 



Salaries. Labour. 



$ 
52,035 

32,453 
13,106 

13,946 
7,600 
310 
12,810 
24,300 
10,967 

3,"7 

2,620 

343 

i,657 

14,654 

i6,356 

684 

1,272 



$ 
66,552 

34,3oi 
9,880 

12,468 
7,347 



11,790 

26,075 

8,781 

1,261 

i,575 

6,539 

5,273 

18,394 

7,092 

54i 

4,811 

440 



947 



208,230 224,073 



1875. 



Salaries. Labour 



$ 
58,803 
37,898 
15,401 
14,219 
7,722 
669 

14,559 
28,782 
11,424 

2,754 

1,885 

560 



22,770 

17,651 

863 

2,250 



1,649 



$ 

88,540 

30,057 

12,153 

7,098 

4,101 



16,308 

19,700 

18,521 

4»5o6 

1,245 



59,H7 
9,237 
1,442 
2,716 
1,090 



i,339 



239,859 278,059 



:8 7 6. 



Salaries. Labour. 



$ 
64,243 
43,010 
15,600 
14,262 

8,595 

300 

12,946 

28,520 

12,258 

2,879 

1,926 

641 



20, 104 

18,251 

1,116 

2,360 



i,596 
2,345 



250,952 



S 

81,376 
29, 104 
17,171 

6,424 
11,690 

1,190 

13,273 
14,428 

n,477 
4,034 
1,601 



33.340 
4,490 
4,025 
2,302 

2,185 



[8,871 
161 



257,H2 



Recapitulation. 



ITEMS. 


*873- 


1875. 


1876. 


Total Salaries 


'$ 
208,230 

224,073 


239,859 
278,059 


$ 
250,952 

257,142 


Total Labour 




Railways and Telegraphs 


432,303 
1,063,882 


517,918 
1,621,654 


508,094 
1.536,403 






Total Expenditures on Canals, Rivers, Railways, 
&c, charges on Revenue in 1873 

Total Expenditures on Canals, Rivers, Railways, 
&c, charges on Revenue in 1875 


$1,496,185 


$2,139,573 




Total Expenditures on Canals, Rivers, Railways, 
&c, charges on Revenue in 1876 


$2,044,497 









I now come to the details of expenditure on Civil Government. I have 
separated salaries from contingencies, and the table is as follows : 



PUBLIC EXPENDITURE. 47 

Details of Expenditure on Account of Civil Government. 



Departments. 



Gov. -General and Lt. -Governors. 

Secretary's Office 

Privy Council 

Department of Justice 

Militia and Defence 

Secretary of State 

Minister of Interior 

Receiver-General 

Inland Revenue 

Minister of Finance , 

Treasury Board 

Customs 

Public Works 

Public Works Office, B. C 

Post Office , 

Department of Agriculture 

Marine and Fisheries 

Sundry Departments 



Agencies. 



Totals 



i873- 



Salaries. 



99,444 
8,240 
15,876 
17,367 
37,475 
37,o74 
23,382 
24,318 
24,778 
52,382 

3,257 
32,267 
46,624 

5,589 
74,643 
3i,340 
25,336 



559,392 



8,140 

5,o33 
9,47o 
5,764 
9,394 
3,072 
3,224 
9,45i 
9,226 

313 
26,811 

13,^2 



1875. 



Salari 



38,850 
12,723 
10,048 
11,998 



1 76, 709 



[10,494 

n,345 

22,650 
21,844 
43,545 
34,493 
49,344 
28,839 
30,191 
56,304 
3,5oo 

36,137 
60,526 

2,576 
88,936 
37,674 
3!,326 



15,442 



685,166 



",o75 

5,496 

10,852 

11,971 

12,743 

io,345 

5,644 

8,7i5 

16,611 

706 

19,375 

17,453 



1876. 



Salaries. 



40,872 
11,059 
u,559 
17,851 



212,327 



$ 
112,665 
10,971 
20,732 
22,983 
44,071 
38,702 
48,063 
28,445 
31,565 
54,^99 
4,159 
35,743 
56,940 



92,460 
35,655 
32,789 



670,142 



$ 



15,822 
4,554 
4,996 
5,97i 
7,650 
6,138 
3,669 
5,907 

I4,39S 
709 

17,234 

11,320 



31,820 

13,500 
11,911 
16,003 



171,602 



Recapitulation. 



Items. 



Total Salaries 

Total Contingencies 
Land Office, Manitoba. , 
Dominion Office, N.S., 
Dominion Office, N.B. . 
Stationery and Sundries , 
Civil Service 



Total Expenditure on account of Civil Govern 
meat in 1873 



873. 



$ 
559,392 
1 76, 709 

3,973 
3,269 
4,693 
2,838 



$750,874 



Total Expenditure on account of Civil Govern- 
ment in 1875 



1875. 



685,166 

212,327 

11,098 



47 
627 



$909,265 



Total Expenditure on account of Civil Govern- 
ment in 1876-. 



1876. 



$ 
670, 142 
171,602 



251 



$841,995 



I have also dissected the contingencies ■ separating the charge for extra 
clerks from the other items. It has been stated very positively by the hon- 
ourable Senator from Toronto (Mr. McMaster) that the public offices were 
filled by supernumeraries appointed by the late Government just before their 



48 



PUBLIC EXPENDITURE. 



retirement from office ; and a similar statement was made by the honour- 
able Senator from Hamilton (Mr. Hope), when the subject was before the 
House a few weeks ago. It has been made and constantly repeated by the 
Government and their supporters for years. The Prime Minister himself 
even has made the same statement, adding that many of the appointments 
made by the late Administration just before retiring from office had 
been cancelled by the new Government. If appointments had been 
improperly made I would not defend them. I presume no officials but those 
for whom there was work were retained by the new Government. No doubt em- 
ployment was found for them very soon ; but if it be true that many super- 
numeraries were appointed by the late Government, and remained unem- 
ployed, how is it that so many extra clerks were required in the departments ? 
It is impossible to believe that, even extravagant as the present Government 
is, it would have employed extra clerks while supernumeraries remained 
idle about the departments. The following statement is a complete refuta- 
tion of this charge against the late Administration : — 

Departmental Contingencies at Ottawa, with Amount paid to extra 
Clerks, (which Items form part of total Contingencies.) 



Department. 



Secretary's Office 

Privy .Council 

Justice 

Militia and Defence 

Secretary of State, includ- 
ing Queen's Printer in 

1875 

Interior 

Receiver-General 

Inland Revenue 

Finance 

Treasury Board 

Customs 

Public Works 

Post Office 

Agriculture 

Marine and Fisheries 
Sundry Departments 



Departmental Totals . . . 
Contingencies of House of 
Commons 



Total Departmental Con 
tingencies at Ottawa, '73 

Total Departmental Con 
tingencies at Ottawa, '75 

Total Departmental Con 
tingencies at Ottawa, '75 



873. 



$ 
8,140 

5.033 
9,470 
5,764 



9,394 

3,072 

3,224 

9>45 

9,226 

3i3 
26,81 

13,192 
38,850 
12,723 
10,048 
n,998 



176,709 
104,008 



280,717 



w 



991 



956 



2,142 
1,209 



311 

2,414 

4,677 
55i 

4531 



13,704 



[875- 



-3 B 

o 

o 



$ 
11,075 

5,496 
10,852 
11,971 



12,743 

io,345 

5,644 

8,7i5 

16,611 

706 

19,375 

17,453 

40,872 

11,059 
n,559 
17,851 



212,327 
90,000 



302,327 



$ 
1,856! 



[,IOO 

[,900 



720 

1,370 
3.400 

5,838 



1,697 
3,541 

14,183 

2,717 

499 



38,821 



1876. 



rt 



f2f 
c 
o 
Q 



$ 
[5,822 

4,554 
4,996 
5,97i 



7,650 

6,138 

3,669 

5,907 

14,398 

709 

17,234 

11,320 

31,820 

13,500 

11,911 

16,003 



171,602 
130,000 



301,602 



w 



$ 
2,673 



325 
932 



2,162 

9 
1,820 
8,287 



i,433 
i,578 
6,890 

3,785 
i,757 



31,651 



PUBLIC EXPENDITURE. 



49 



The payments to extra clerks in 1875 were a ^ Dut three times as much as 
in 1873, and nearly twoand-one-half times as much in 1876 as in 1873. It 
has been alleged throughout the length and breadth of the land that the in- 
creased expenditure in the departments was due to the supernumeraries ap- 
pointed by the late Government before they retired ; but the foregoing state- 
ment tells a different tale, and fastens the responsibility of the increase upon 
the present Administration. 

The next statement I submit is upon a subject which I, as a layman, feel some 
delicacy in criticizing — the Administration of Justice. I must, however, call 
attention to it, for the increased expenditure under this head is enormous : — 

Details of Expenditure — Administration of Justice. 



Items. 



ontaeio. 

Court of Error and Appeal. 

" Queen's Bench . . . 

" Chancery 

Common Pleas. . . 

County Judges 

Circuit allowances 



Total Ontario 

QUEBEC 

Court of Queen's Bench . 

Superior Court 

Court of Vice-Admiralty. 
Circuit allowances 



Total Quebec 



Total Nova Scotia 

" New Brunswick 

" Manitoba and North-West. 

" British Columbia 

" Miscellaneous 

" Prince Edward Island .... 

" Supreme Court 



1873- 



166 



$ 2,11 
14,, 

I4,i< 

i4,5< 

104,521 

11,900 



,5°° 
:o8 
;oo 



161,696 



24,152 
78,774 

3,°3! 
13,826 



119,784 

3 2 >5°° 
33,649 

6,35o 
37,3i8 

7,666 



Total expenditure on Administration of 
Justice, 1873 

Total expenditure on Administration of 
Justice, 1875 

Total expenditure on Administration of 
Justice, 1876 



$398,966 



1875. 



$ 20,999 
J5>999 
J 5,999 
1 5,999 
117,877 
11,800 



198,676 



25,999 
112,743 

3,031 
11,632 



153,406 

32,449 
36,699 

J 3,949 
42,991 

4,i54 
i5,o77 



$497,405 



1876. 



$ 



20,999 
*5,999 
*5,999 
J 5,999 
117,896 
11,600 



198,496 



25,998 
113,201 

3,°3 6 
9,210 



i5 r ,445 

34,o99 
36,788 
16,884 

40,527 
14,991 

!5,!99 
35,657 



$544,091 



The Court 01 Error and Appeal for Ontario down to 1875 was composed 
of the nine judges of the Superior Courts of the Province, and was presided 
over by a retired Chief Judge, whose pension was three-fifths of his former 
salary ; and the sum paid him as Chief Justice in Appeal — Two Thousand 

D 



50 PUBLIC EXPENDITURE. 

Dollars — made up his salary to what it had been before he retired from the 
Chief Justiceship of one of the Superior Courts. This was the condition of 
affairs down to 1875, and the cost of the Court to the country was only Two 
Thousand One Hundred and Sixty-six Dollars a year. Hon. gentlemen who 
are not aware of the facts may imagine that this Court of Appeal did its 
work inefficiently and unsatisfactorily. But the truth is the very reverse of 
this. So satisfied were suitors, as a rule, that but few of its decisions were 
appealed from to the Judicial Committee of the Privy Council, and no one of 
its judgments has ever been reversed. The Judiciary of Ontario occupies a 
proud pre-eminence among the Judiciaries of the Colonies of the British Empire: 
no one of the judgments of the Court of Appeal of that Province has been 
reversed. 

Hon. Mr. Scott said the Court of Error and Appeal was constituted under 
a statute of the Ontario Legislature. 

Hon. Mr. Macpherson — I am quite aware of that, but Ontario did not 
not appoint the judges or assign the salaries. I do not believe the 
Minister of Justice would attempt to evade any of his responsibility in this 
matter. 

Hon. Mr. Scott — We could not have controlled it in the slightest degree. 

Hon. Mr. Macpherson — I am aware the present Minister of Justice was 
not in office when the Court was constituted and the judges were appointed; 
but will the Secretary of State say that Court was constituted without the 
express sanction of Mr. Blake ? 

Hon. Mr. Scott said on the same principle the Minister of Justice would 
be held responsible for the appointment of additional judges in Quebec the 
following year, and for the appointment of County Court Judges in Nova 
Scotia. 

Hon. Mr. Macpherson — There is no analogy between the cases. The 
Minister of Justice does not possess the same influence in Quebec or Nova 
Scotia that he does in Ontario. He is not the leading member of the Bars 
of those Provinces as he is of the Bar of Ontario. No Legislature of Ontario 
would have ventured to constitute a Court for that Province without the 
express sanction of the present Minister of Justice; and no judges would have 
been appointed without his being consulted. One of the charges against the 
late Hon. Sandfield Macdonald's Government in Ontario was, that it held too 
intimate relations with the Dominion Government of that day. I am not 
aware that any fact has ever been brought to light to prove that those re- 
lations were prejudicial to the public interest. Can as much be said 
for the present Government of Ontario and the Mackenzie Administration ? 
The cost of Sir John Macdonald's Court of Appeal for Ontario was Two 
Thousand One Hundred and Sixty-six Dollars a year ; the cost of the new 
Court is Twenty-One Thousand Dollars a year, and this does not by any means 
represent the enormous increase in the cost of litigation, caused by the 
changes.* When the Government of the day intended to create a Supreme 
Court for the Dominion, at a cost of Thirty-Five Thousand Six Hundred 
and Fifty-Seven Dollars, they should not, I submit, have created a Court of 
Appeal for Ontario, but should have appointed additional judges, if necessary, 
in the existing Courts. I believe there never was such an opening for law 
reformers in Ontario as at present. In saying this,* I do not wish to detract 
in any way from the Minister of Justice, who stands at the head of his pro- 

* The changes in the system of judicature, effected by the present Government of Ontario 
and of the Dominion, promoting, as they do, appeal after appeal from Court to Court up to 
the Supreme Court at Ottawa, have increased enormously the cost of the Administration of 
Justice to litigants as well as to the public. 



PUBLIC EXPENDITURE. 



51 



fession, and is a great lawyer ; but history tells us that all great lawyers have 
not been successful law reformers. I now come to the expenditure in the 
Customs Department : — 

Customs — Details of Expenditure for 1873, 1875 AND 1876. 



Provinces. 






i873. 



1875 



1876 



Ontario 

Quebec 

New Brunswick 

Nova Scotia 

Manitoba 

British Columbia 

Prince Edward Island 



$183,505 

176,985 

73,353 

93)97o 

8,352 

24,477 



1217,051 
196,592 
94,716 
100,712 
12,039 
19,056 
22,727 



Total Expenditure for 187S | $567,675 

Total Expenditure for 1876 

Total Expenditure for 1876 



$682,673 



$226,874 
211,285 

93,457 

105,098 

12,989 

23,323 

25,548 



$721,008 



It will be observed that while the revenue from Customs has very greatly 
decreased, the cost of collecting it has steadily increased. The cost of 
collecting this branch of the revenue in 1876 was Thirty-eight Thousand 
Three Hundred and Thirty -five Dollars more than 1875, while the revenue 
for the same period fell off Two Million Five Hundred and Twenty-Seven 
Thousand One Hundred and Seventy-four Dollars. The present Government 
is of course alone responsible for the expenditure of last year, and I 
should like to hear a reasonable explanation of the increased cost of collect- 
ing the Customs revenue. 

I will take the Excise Department next. Under the circumstances it is 
extraordinary. In it the expenditure has been as follows : — 



Excise — Details of Expenditure for 1873, 1875 and 1876. 



Items. 


1873- 


1875- 


1876. 


ONTARIO. 

Salaries 


$76,791 
12,005 


$94,066 
16,891 


$92,119 

24,030 


Contingencies 




Total Ontario 


88,796 

25,299 
4,752 


JI °,957 

30,968 
6,651 


116,149 

3i,349 
7,901 


QUEBEC. 

Salaries 


Contingencies 




Total Quebec 


3°,°5 I 


37,6i9 


39,25° 



52 



PUBLIC EXPENDITURE. 



Items — ( Continued). 



NOVA SCOTIA. 



Salaries 

Contingencies 



1873. 



6,203 
535 



Total Nova Scotia . . . 

NEW BRUNSWICK. 



Salaries 

Contingencies 



Total New Brunswick 



Total Salaries 

Total Contingencies 

Manitoba 

British Columbia .... 
Prince Edward Island 
General Expenses .... 



Total Expenditure for 1873 
Total Expenditure for 1875 
Total Expenditure for 1876 



6,738 



5,139 
871 



6,010 



H3 5 43 2 
18,163 

1,924 

1,285 



36,900 



$171,704 



1875. 



7,900 
2,724 



10,624 



7,i5° 
!,399 



8,549 



40,084 
27,665 

3,998 

5,3i8 

3,056 

19,132 



$199,253 



1876. 



7,275 
3,455 



10,730 



6,885 
1,380 



8,265 



137,628 
36,766 

4,253 

6,208 

3,829 

29,675 



$218,359 



It will be seen that the expenditure in this department has largely increased 
since 1873; the contingencies have actually more than doubled. It is 
incredible that the necessities of the service called for so large an increase in 
expenditure. 

I now come to the Department of Immigration and Quarantine. I believe 
no money has been spent by this Government from which the country has 
got a smaller return. I hope the Minister at the head of that Department 
will tell the House why it is so. 

The following letter, from the then Agent-General of Canada, published in 
the London Times of 12th July, 1875, when the Premier was in England, 
must have checked emigration to Canada : 

" EMIGRATION TO CANADA. 

" To the Editor of the Times: 

" Sir, — Will you permit me to make, through the columns of the Times, an intimation 
" which may serve to prevent a great deal of disappointment and trouble ? The advices 
" which I have from Canada, both privately and in the press, as well as from gentlemen 
" who have lately arrived from there, show that in the present state of commerce and 
" trade in the Dominion, and especially at so late a period of the emigration season, it is 
" not advisable to encourage the emigration from this country of artisans, mechanics, clerks, 
" and general labourers to Canada. These persons, arriving in the middle of July or in the 
" beginning of August, will find a depressed state of trade and a lack of general employ - 
" ment ; and unless they have extraordinary energy and self-reliance, or sufficient means to 
" sustain themselves for a considerable time, they may find themselves forced to face a 
•' Canadian winter with no prospect of employment. To encourage emigration of such 
" persons, in such circumstances, would be almost criminal, and equally disastrous to the 
" emigrants themselves and to the interests of Canada. I am, however, advised that there 



PUBLIC EXPENDITURE. 



53 



is still one interest which continues to flourish, and that there is still a healthy demand 
for agricultural labourers. I do not, therefore, desire to discourage the emigration of these 
classes, provided that they do not take out with them large families. But still I deem it 
advisable to announce that the Canadian Government will not press during the approach- 
ing autumn for a large exodus even of these classes. For female domestic servants there 
is always a demand, at good wages in Canada, and it would be safe for them to go at any 
time. I am assured that in a few months the unsatisfactory condition of the labour 
market in Canada will have been greatly altered, and I hope soon, in view of the public 
works which are projected, and the increasing prosperity of the Dominion, to be able 
again to recommend to English labourers of all classes the selection of Canada as their 
home. In the meantime, the efforts of the Canadian agents will be devoted, during the 
autumn and winter, to preparation for a large emigration in the spring, and I shall cause 
registers to be opened by the Government agents in all parts of the country, to which 
laborers of all kinds may send their names, descriptions and copies of testimonials, which 
will be forwarded to the Government agents in Canada, with a view to enabling them to 
transmit to this office any offers that may be make by the local employers to secure the 
services of such persons. The details of this arrangement, however, will be otherwise 
announced. 

" I am, sir, your obedient servant, 

"EDWARD JENKINS, 
Canada Government Buildings, " Agent-General. 

" Westminster, July 9." 



In the face of such a circular as that, how could we expect immigration to 
flow into this country? Could anything be more ill-advised, or exhibit 
greater ignorance of the field which Canada offeis to immigrants ? This 
country is specially adapted for workingmen with large families. It will 
cost the country a large sum to restore the stream of immigration diverted by 
this unwise advertisement. It gives to the Immigration Agents of other 
countries a strong argument against Canada. The following statement shows 
the expenditure of the Department, and the cost of the immigrant pet 
capita : — 

Details of Immigration and Quarantine for 1873, 1875, AND 1876. 



Items. 


i873- 


1875- 


1876. 


Total expenditure 


$277,368 
11,871 


$302,770 
13,768 


$385,845 
12,233 


Quarantine items 


Total in 1876 on account of Mennonites : 
Transport 


38,761 
57,670 


Loan 












Total number of Immigrants by the St. 
Lawrence route for 1873 

Total number of Immigrants by the St. 
Lawrence route for 1875 


36,901 


16,038 


$96,431 




Total number of Immigrants by the St. 
Lawrence route for 1876 




10,901 


Cost per head in 1873 


$7 76 


$18 90 


Cost per head in 1875 




Cost per head in 1876 




* $26 55 



*This is based on expenditure, less the amount paid to the Mennonites. Adding cost of 
transport of Mennonites, but excluding the loan, the cost per head of all immigrants for 1876 
was Thirty Dollars and Ten Cents. 



54 PUBLIC EXPENDITURE. 

In this statement I have not included the immigrants who entered Canada 
by the Suspension Bridge — who were people passing through from New York 
to the Western States, or who came to reside temporarily in Canada, and 
whose effects were admitted duty free when they described themselves as 
settlers. 

The appointment of Mr. Jenkins as Agent-General was an unfortunate 
step. The immigration now is almost nominal, while the expenditure 
continues enormous; and why this is allowed I hope the Minister of 
Agrirculture will be able to explain. Not only have large sums been paid 
to promote immigration, but a large amount has also been paid for emigra- 
tion, or what is called euphoniously "repatriation." When repatriation was 
first spoken of in this country, I understood it to mean encouragement which 
was to be offered to French Canadians who had left Canada for the United 
States, under a misapprehension, and who desired to return and settle in their 
own country, but had not the means. But if there was a willingness to do 
this, I did not suppose that Canada was going to assist people to return to 
Europe. The expenditure was voted by Parliament for the purpose of bringing 
people into the country, and not for sending them out of it, but I find in the 
public accounts that the sum of Five Thousand Four Hundred and Sixty- 
Four Dollars and Forty-nine Cents has been expended in aiding foreigners 
to return to their native land. I consider such expenditure most unwarrant- 
able, because there are ample opportunities afforded to industrious people to 
. make a comfortable living for themselves and their families in this country. 
The expenditure was unwise, and was a misapplication of the money of the 
tax-payers of this country. The next matter of detail to which I will call 
attention is the expenditure under the Weights and Measures Act This 
measure was passed by the late Government, and the then Finance 
Minister, Sir Francis Hincks, estimated the expenditure at Fifty Thousand 
Dollars ; but it has cost Ninety Thousand or One Hundred Thousand Dollars 
a year since it was put in operation. 

Hon. Mr. Scott — The fees are not credited in that account ; they are 
paid into the Consolidated Fund. 

Hon. Mr. Macpherson — The present Government was premature 
in putting this Act into operation. There was nothing in the Act requiring 
that it should go into operation until the country was prepared for it. It 
required the proclamation of the Governor-General to put it into operation, 
and that proclamation must have been issued upon the advice of the. present 
Government. I think the Government will find it a difficult matter to 
justify this expenditure. The truth is that wherever it could be done, or 
under whatever Act it was possible to dispense patronage, it was dispensed, 
and every plausible excuse was advanced to justify and excuse it. The con- 
sequence is the enormous increase in the public expenditures under the 
auspices of the present Government, to which I am now calling attention. 

Hon. Mr. Scott — There were certain limitations in the Act as to the kind 
of weights and measures to be enforced after 1874. 

Hon. Mr. Macpherson — It was not obligatory on the Government to 
enforce the new Act until the circumstances of the country rendered it 
desirable. 

The next statement which I propose to submit will be interesting in 
itself rather than reflecting upon any Government. It is a comparative 
statement of the public debt and the interest thereon since 1873 : 



PUBLIC EXPENDITURE. 55 

Comparative Statement, Public Debt and Interest. 



Public Debt. 



Total debt, 1873. . . 
Increase, '73 to '74. 
Total debt, 1874. . . 
Increase, '74 to '75. 
Total debt, 1875..., 
Increase, '75 to '76. 
Total debt, 1876 ... 



Totals. 



$ 
129,743,432 



141,163,551 
151,663,401 
161,204,687 



Increases. 



Total increase of debt in 1874, 
1875, and 1876 



31,471,255 

Total increase of interest in 1874, 1875, and 1876 



$ 

11,420,119 

10,499,850 

9,541,286 



Interest on Debt. 



Total interest, 1873. 
Increase, '73 to '74. 
Total interest, 1874. 
Increase, '74 to '75. 
Total interest, 1875. 
Increase, '75 to '76. 
Total interest, 1876. 



Totals. 



5,549,374 
6,122,844 
6,340,056 
6,753,171 



Increases. 



573,470 
217,212 
413,115 



1,203,797 



Hon. gentlemen know that interest is charged against the Consolidated 
Fund ; and since the 30th of June, 1873, tne increased amount of interest 
charged to that fund has been One Million Two Hundred and Three Thousand 
Seven Hundred and Ninety-seven Dollars — not the annual increase, but the 
total increase of interest during those three years. Hon. gentlemen will here 
find a confirmation of what I have stated — 'that the burthens of the people are 
not being lightened, but grievously increased. My next statement will show 
the annual expenditure on account of the public debt since 1873 : — 

Annual Expenditures on account of Public Debt compared since 1873 





1873. 


1874. 


1875. 


1876. 


Interest 

Management and Exchange 

Sinking Fund 


$ 

5,209,205 
178.644 
407,826 


$ 

5.724,436 
264,683 
513,920 


$ 

6,590,790 

227,200 

555,773 


$ 

6,400,902 
208, 147 
822,953 




Total Expenditure on account of 
Public Debt in 1873 

Total Expenditure on account of 
Public Debt in 1874 


$5,795,675 


$6,503,039 


$7,373,763 




Total Expenditure on account of 

Public Debt in 1875 

Total Expenditure on account of 
Public debt in 1876 


$7,432,002 











Hon. Mr. Wilmot — I should like to know whether the amount paid into 
the Sinking Fund is an asset ? 

Hon. Mr. Macpherson — It is an asset in a certain sense, but can 



56 



PUBLIC EXPENDITURE. 



not be used. It is so much paid in and accumulating to pay the 
debt. It is chargeable against income. The interest, Sinking Fund and 
other charges amounted to Seven Million Four Hundred and Thirty-two 
Thousand and Two Dollars for the year ending the 30th of June last, being 
an increase of One Million Six Hundred and Thirty-six Thousand Three 
Hundred and Twenty-seven Dollars over 18 7 3. 

Hon. Mr. Scott — Chargeable to this Government ? 

Hon. Mr. Macpherson — The loans were negotiated and the expenditure 
made under this Government. I do not intend this statement as a reflection 
on any Government, though the expenditure has been incurred by the present 
Administration. My object in submitting the statement is to call the atten- 
tion of Parliament and of the country to the enormous rate at which the bur- 
thens of the people are being increased. I do so in the hope that the Gov- 
ernment, Parliament and the people will see that they will have to be prudent, 
and that they should hesitate before they expend Twenty Million Dollars 
between Lake Superior and Red River, which would increase the annual taxa- 
tion, for interest alone, One Million Dollars, to say nothing of the enormous 
annual loss that would result from working the railway. 



Increase of Annual Expenditure on account of Public Debt since 1873 



Interest paid on Public Debt . . 
Management and Exchange . . 
Sinking Fund 



Total increases 
Less for decreases 



Net increase in 1874 

Net increase in 1875 

Net increase in 1876 

Net increase of 1876 over 1873 



Increase in 
1874. 



$515,231 

86,039 

106,094 

$707,364 



$707,364 



Increase in 
1875. 



$866,354 
decrease 37,483 

41,853 

$908,207 
37,483 



$870,724 



Increase in 
1876. 



decrease 189,888 

decrease 19,053 

267,180 



Increase 1876 
over 1873. 



$267,180' 
208 941 1 



$58,239 



$1,191,697 

29,503 

415,127 



$1,636,327 



$1,636,327 



I ask the hon. gentlemen opposite if this increase in the annual burthens in 
connection with the public debt is not a serious matter ? I look upon it with 
alarm when I consider the unprofitable and useless objects for which this 
capital is being expended. 

Hon. Mr. Wilmot — Hear, hear. 

Hon. Mr. Macpherson — I will submit a comparative statement of expen- 
diture charged to capital account in the years 1873, 1874, 1875 an d 1876; 
also a comparative statement of Revenue and Expenditure since Confedera- 
tion, showing the surplus or deficit for each year, and a statement of Capital 
Expenditure for the same period. These statements are interesting in 
themselves ■ — 



PUBLIC EXPENDITUKE. 



57 






Items of Expenditure charged to Capital in Public Accounts, 
in the years 1873, i ^74, 1875, and 1876- 





Totals. 


Name of Work. 


1873. 


1874. 


1875. 


: 1876. 




8 

3,445,299 

691,631 

82,173 

794,365 

9,448 

250,157 

70,315 

11,473 

140,501 

2,415 

11,145 

50,215 


Welland Canal 


8 

82,282 

7,824 

33,241 

132,822 

4,877 

376 


746,420 
158,618 
26,541 
190,323 
4,018 
54,935 
12,753 


$ 

1,047,119 

197,420 

22,391 

249,512 

443 

90,352 

32,627 

9,310 

63,659 

2,415 

20 


$ 
1,569,478 

327,769 




Lachine Canal 




Carillon and Grenville Canals 


221,708 
110 




Carillon and Chute a Blondeau .... 


104,494 

24,935 

2,163 
















76,842 












St. Peter's 






11,125 
50,215 














35,931 
68,585 


49,604 
86,359 


42,941 
47,858 
48,070 
27,254 
23,358 

474,529 

7,411 

1,012,789 

3,544 

28,560 






5,559,137 






692,792 

2,137,692 

83,940 

2,724,201 

8,544 

215,844 

113,055 

195,370 

179,804 

111,394 


40,067 






78,088 

12,670 

100,000 

37,013 

791,121 

76,529 

1,711,412 


Parliament ) 
Buildings j ' ' 


















Pacific Railway .. 




561,818 


310,224 






Steel Rails 






















187,284 
113,055 


















19,405 


175,965 










179,804 
111,394 
















63,238 
4,827,183 








5,764,844 






11,889,295 

88,632 

1,279,309 

25,337,241 




Intercolonial . . . 




3,417,661 


2,645,460 

46,086 

780,638 


998,991 
42,546 




P. E. I. Railway 


Government 
Railways.. ..... 


Nova Scotia and New Brunswick . . 
Totals 


192,055 


197,236 


109,330 


Total spent ) 
1873 to 1876) •' 


6,005,340 


5,354,098 


6,923,185 


7,154,118 







General Summary. 



Totals. 


ITEM8. 


1873. 


1874. 


1875. 


1876. 


$ 

5,559,145 

5,828,082 

11,889,325 

1,279,259 

88,632 


Canal Works 

Pacific Railway 

Intercolonial Railway 

Gov't. Railways, N. S. and N. B 

P. E. I. Railway 


$ 

261,430 

625,056 

4,827,183 

192,055 


$ 
1,193,608 

310,224 
3,417,667 

197,236 


$ 
1,715,268 
1,546,288 
2,645,474 

780,638 
46 086 

189,481 


2,388,839 

3,846,564 

999,001 

109,330 

42,546 


692,798 


Parliament Buildings , 


99,516 


135,963 


267,838 




Total Expenditure charged to Capital in 
Public Acceunts in 1873 

Total Expenditure charged to Capital in 
Public Accounts in 1874 

Total Expenditure charged to Capital in 
Public Accounts in 1875 

Total Expenditure charged to Capital in 
Public Accounts in 1876 




25,337,241 


6,005,240 


5,254,698 


6,923,185 


7,154,118 







N.B.— Total for Intercolonial to 30th June, 1876, Twenty-one Millions Five Hundred and Eighty-two 
Thousand One Hundred and Eighty-eight Dollars. Total for Pacific Railway to same date Six Millions Two 
Hundred and Fifty-four Thousand Two Hundred and Eighty Dellars. These amounts include expenditure 
previous to 1873, not shown above. 



58 



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60 PUBLIC EXPENDITURE. 

I think the foregoing statements will be useful and interesting to the country. 
They are not exhibited with the intention of blaming any Government, as the 
works have been carried on under Acts of Parliament, and the Government 
was only bound to see that they were conducted in an economical manner. 
Whether the Government have done that or not is best known to themselves, 
but from all that has been discovered of the wasteful expenditures of the present 
Government, I think the House can not be blamed if it incline strongly 
to the opinion that the whole might have been done much more economi- 
cally. Many items of expenditure are wholly indefensible. I believe I have 
proved that the statement made by the Prime Minister in another place was not 
correct. A portion of the public burdens "may be changed from one column to 
another of the Public Accounts, but the burdens will remain undiminished 
and will increase. If the hon. Secretary of State can prove the facts to be 
otherwise, I shall be very glad. I have not the advantage of the Finance 
Ministers revision this session of the estimate of revenue brought down by him 
last session. I have proved that down to 1873 the finances of the country 
were in a sound and easy condition ; that the Government of that day was 
perfectly justified in undertaking the construction of works, payable out of 
income, which they proceeded with ; that the surpluses during the six years 
they were in office amounted to the enormous sum of Eleven Millions One 
Hundred and Sixty Thousand Eight Hundred and Forty-four Dollars ;* 
that not only were the works properly chargeable to income paid 
for out of income, but that a large amount was paid out of in- 
come which was fairly chargeable to capital, thus avoiding pro tanto 
the expenditure of capital ; that Mr. Tilley made provision for the estimates — 
supplementary estimates— and for the increased statutory expenditure of 
the session of 1873; that tne surplus of that year and of the following year were 
ample to cover the expenditure and leave no deficit ; that at that time income 
and expenditure were pretty evenly balanced, but there was no deficit ; that 
the new Government, when it succeeded to office, apparently desiring to in- 
crease the expenditure, imposed new taxation, which the Minister of Finance 
estimated would yield Three Millions of Dollars, but which only yielded One 
Million Seven Hundred Thousand Dollars ; that that was the beginning and 
the cause of the financial difficulties which resulted in a deficit of Two Millions 
of Dollars on the 30th June last. 

Hon. Mr. Scott — Where will I find the supplementary estimates of Mr. 
Tilley for 1874 ? 

Hon. Mr. Macpherson — There were supplementary estimates that year. 

Hon. Mr. Scott said there was nothing but what appeared in the ordinary 
estimates. Schedule B and schedule A were for amounts expended from the 
former year. 

Hon. Mr, Macpherson — Mr. Tille> mentioned both the expenditure em- 
bodied in Acts of Parliament and in supplementary estimates,as quoted before re- 
cess. This shows that Mr. Tilley had brought down supplementary estimates,! 
the items in which and in Acts of Parliament made the increased expenditure 
of the session of 1873 amount to One Million Five Hundred and Forty-Two 
Thousand Dollars, according to Mr. Tilley; and to show that that amount was 
substantially correct, I will quote the following words from Mr. Cartwright's 

*Mr. Tilley showed that between Confederation and June 30, 1872, there had been paid 
out of surplus revenue towards the construction of public works chargeable to capital 
$9,522,022, to which I add the surplus of 1873, $1,638,822. 

+ Mr. Tilley's supplementary estimates in the session for 1873 amounted to Five Hundred 
and Forty Seven Thousand One Hundred and Eighty-Three Dollars. 



PUBLIC EXPENDITURE. 61 

Budget speech of 1874: — ''The legislation of last session added over One 
" Million Five Hundred Thousand Dollars to the fixed charges of the coun- 
" try." The sum of Two Millions of Dollars in schedule A of the Supply 
Bill of 1874, charged against revenue, I believe was altogether for in- 
creased expenditure which the revenue did not cover, and for which the presem 
Government is responsible. 

Hon. Mr. Scott — No, no ! Our contention is that we entered upon no 
new expenditures, and that it required Two Millions to meet Mr. Tilley's 
deficiencies. 

Hon. Mr. Macpherson — The Public Accounts do not bear out tbat state- 
ment. There was a large expenditure in 1875 an d 1876 upon works which 
had not been commenced in 1873 or 1874. The Government have, un- 
questionably, been extravagant and reckless in their expenditure. They have 
disregarded the pledges of retrenchment and economy upon which they came 
into power, and placed the country in financial peril by not providing for the 
deficit which resulted from their miscalculation, as soon as they discovered it. 
The expenditure of 1876 over 1875, for which they alone were responsible, 
amounts to Seven Hundred and Seventeen Thousand and Sixty-Two Dollars. 

The object I have in view in bringing this subject under the notice of the 
House is to show the enormous increase in the controllable expenditure 
during the last three years, for which the present Administration must neces- 
sarily be held responsible. This expenditure increased at the rate of Six 
Hundred Thousand Dollars per annum ; or One Million Eight Hundred 
Thousand Dollars in the three years. I have given them credit for the expen- 
diture resulting from the legislation of 18 73. The actual increased expendi- 
ture of 1876 over 1873 was Three Millions Six Hundred and Sixty-seven 
Thousand Three Hundred and Eight Dollars, of which the present Finance 
Minister alleges One Million Five Hundred Thousand Dollars resulted from 
the legislation of 1873. I accept this statement as correct, and I allow 
Three Hundred and Sixty. seven Thousand Three Hundred and Ninety-eight 
Dollars in addition, which is a liberal allowance for reasonable and necessary 
increases. The balance — nearly Two Millions of Dollars — therefore is the 
amount of the increased controllable expenditure incurred by the present 
Administration. The correctness of this statement is confirmed by the fact 
that the actual ascertained increase in controllable expenditure for 1876 over 
1875 is Seven Hundred and Seventeen Thousand and Sixty-two Dollars, and 
that year was entirely within the control of the present Government. This 
sum multiplied by three would give a considerably larger increase for the 
three years than I charge against the Administration. 

I will refer to one other matter. In the Speech from the Throne, delivered at 
the opening of the session, the following paragraph found a place : — " Notwith- 
" standing the loss of revenue, consequent chiefly on the diminution of our 
" importations, the reductions effected during the current year have gone far 
" to restore the equilibrium between income and expenditure, though great 
" economy will still be needful to attain that object." I hope this will 
prove to be the case. 

This session was opened in the beginning of February, at a time when the 
Government knew that the revenue of the country was falling off ; when they 
knew that it was then less by Three Hundred and Twenty-six Thousand Five 
Hundred and Six Dollars than it was at the same time last year. They were 
aware that large additional amounts would have to be charged against the Con- 
solidated Revenue Fund for the increased public debt, that at least Six Hundred 
Thousand Dollars per annum had been added to it for interest on the new 
loan negotiated at the end of last year ; they knew it was being added to 



62 PUBLIC EXPENDITURE. 

otherwise, and that, too, in the face of a decreasing revenue which rendered 
it almost certain that the end of the current financial year would show another 
deficit instead of any restoration of the equilibrium between revenue and 
expenditure. I am not, however, going to charge the Ministry with having put 
words in the Speech from the Throne which they did not believe to be strictly 
true. To do so would be to charge them with a very grave offence, as great 
an offence as the advisers of the Crown could commit, for it would be first 
deceiving the Crown and then employing the Crown as their medium for 
deceiving and misleading the people. I will not accuse the Government of 
this offence, but hope, for the sake of the country, that the result will prove 
the correctness of the words placed in the Speech from the Throne. I shall, 
no doubt, be charged with partizanship, as I have been before, when I have 
called attention to the shortcomings of the Government; but the only partizan- 
ship I have in this matter is in favour of efficient administration.* This is 
my only motive, and I think my course in this House while I have had 
had a seat in it entitles me to expect that my statement will be accepted. 
I expected an efficient and able administration of the public affairs from the 
present Government. I put faith in their pledges of political purity, and 
financial retrenchment ; but I have been sadly disappointed, as the country 
has been. 

* Holding a position independent of parties, as I have always done in the Senate, and 
criticizing measures freely, in the public interest, as I believed, it has been my fate to be charged 
with partizanship by both Governments, each in turn charging me with being the partizan of 
the Opposition for the time being. My study has been to be the partizan of neither. 



SIFZEZEOZBI 



ON THE TARIFF AND LOAN. DELIVERED IN THE SENATE, OTTAWA, ON 

FRIDAY, APRIL 27TH, 1 87 7. 



I am sorry I cannot allow the Bill to pass at this late hour without detain- 
ing the House a few minutes. Changing the Tariff at any time disturbs the 
trade of the country very seriously. The changes proposed now are few and 
small — so small that it is impossible to justify them. They are so insignificant 
that the Government when introducing the Bill ought to have apologized for 
them. The object, I presume, is to increase the revenue ;' and the Secretary 
of State should have told the Senate what additional amount of revenue was 
required, and how much the changes in the tariff were estimated to yield. 
There was a deficit of Two Millions on the 30th June last. The Finance 
Minister has not revised the estimates of revenue made last session during 
the present session of Parliament, so that the House does not know what he 
expects will be the result at the end of the present fiscal year. That 
information should have been furnished to Parliament. There can be little 
doubt that a new deficit will be found to exist at the end of the year. In 
view of the deficit of last year, and the certain accruing deficit of this year — 
amounting together to a very large sum, I fear — it seems trifling to make 
these changes in the tariff for the small sum they will yield. According to 
the estimate of the Finance Minister, submitted in another place, they will yield 
only some Four or Five Hundred Thousand Dollars. If it is intended to sup- 
ply the deficiency in the revenue by this slight increase of the taxation of the 
country, the increase is wholly inadequate for the purpose, and it is difficult 
to imagine any attempt more lame and impotent. The depression throughout 
the country is wholly unprecedented in the memory of any member of this 
House. All the enterprises of the country are stagnant and paralyzed. Our 
financial embarrassment and deficits are increasing. I do not hold the Gov- 
ernment altogether responsible for the prostrate condition of commerce; but 
I contend that if they had a policy, if they had even sympathy for the coun- 
try, they might mitigate the feeling of despondency which prevails so widely. 
I know that men of means who are disposed to embark in enterprises in the 
country are deterred by the fear that if they did so, and became suc- 
cessful, the Government would find some excuse for interfering with their 
prosperity by taxing them, or in some way acting prejudicially to their in- 
terests. It is a very unfortunate opinion or sentiment to be abroad in the 
country, but it is abroad, and it is not altogether without ground. The oft- 
referred-to sugar-refining trade is an instance in point. It was encour- 
aged until it became exceedingly prosperous, but so soon as that was the case 
it became the envy of many, and the Government^ who had previously fos- 



64" TARIFF AND LOAN. 

tered it, turned against it and starved it. The direct tea trade was 
actually stamped out by Parliament at the instance of the present Government. 
The Secretary of State seemed to think lightly of this trade, because it em- 
ployed only one ship. 

Hon. Mr. Scott — Two, one year. 

Hon. Mr. Macpherson — Each ship sent to open trade with a foreign coun- 
try is a pioneer of the commerce of the Dominion. I suppose the great 
Eastern trade of the United Kingdom did not commence with a fleet such as 
is employed in it to-day, but with one ship. I am a free trader, but I believe 
that so long as we have to raise a revenue from customs duties, interests will 
grow up under the protection thus afforded ; and the policy, whether sound 
or not, under which manufactures grow up should not be suddenly changed, 
so as to destroy new and important interests. The effect of an un- 
certain and changing policy is not simply injurious to the interests 
immediately affected, but it engenders feelings of uneasiness and distrust 
which prevent men from embarking their capital in enterprises in this 
country. I contend the people of the Dominion are now suffering 
from these feelings of uneasiness and of distrust in the Government. 
The Administration has manifested a desire to meddle in business matters 
between man and man, and its effect has been injurious. It would be well if 
the tariff could be understood to be fixed for a term of years, that people 
might know what they had to depend upon. The frequent changes that are 
made and the uncertainty that attends the tariff, are unfavourable to the crea- 
tion of new enterprises, and in this way injurious to the country.* The 
debt of the country is being increased with alarming rapidity and for unpro- 
fitable purposes. Sir Francis Hincks, in 1870, showed it was then Twenty- 
two Dollars and Fifty Cents per head. In 1873, Mr. Tilley said the debt, per 
head, had not increased. But in 1876 the debt had increased to Thirty- 
seven Dollars and Ninety-three Cents per head. The taxation had increased 
from Three Dollars and Fifty Cents in 1870, to Five Dollars and Seventy- 
six Cents in 1876; that was the rate of taxation paid last year, but it was 
not enough to meet the expenditure of the country. Six Dollars per head is 
now required. In 1873 Mr. Tilley showed that the duty paid on goods entered 
for consumption was Ten and One-fifth per cent ; in 1876 it was Thirteen 
and Fifty-four Hundredths per cent, showing the average duty had increased 
about one-third ; in other words every person had to pay one-third more duty 
on the goods consumed by him. Where each one contributed Three Dollars 
in this way to the revenue in 1873, every man, woman and child has now to 
contribute Four Dollars. We used to pride ourselves upon this being a 
cheap country to live in. I fear we cannot boast of that any longer. 

Our large unproductive expenditure is not only increasing our burdens at 
home, but is impairing our credit abroad. This was exhibited in the negotiation 
of the loan by the Finance Minister in October last. I do not intend to say 
one word in blame of the way in which that loan was negotiated. The first 
duty of the Minister of Finance was to make certain of success, because it 
would have been unfortunate for the country if he had failed. But he was 
completely in the hands of the moneyed men in England. He had to be 

* In my opinion it is scarcely possible to over-estimate the importance of imparting a 
character of stability to our customs and excise legislation. I think it might be done with- 
out unduly fettering Parliament ; and until it is secured money will not be forthcoming 
freely and confidently, for investment in industrial enterprises in this country. The experi- 
ence of the sugar refiners of Montreal will serve as a warning for a long time to come. 
Capitalists will not expose their property to the possibility of being experimented upon — as 
sources of new taxation — by Ministers of Finance. 



TARIFF AND LOAN* (55 

guided by the financial agents of the country, and although they might have 
advised him to place the loan at a low price, I would not blame them. The 
Dominion had no right to expect them to give us their money on better terms 
than they could obtain from others. We had no claim upon them, and when we 
went to them for a loan they treated us as a banker would a customer in this 
country. They would naturally ask what had been our success during the 
preceding year — what had been the measure of our prosperity. When this 
question was asked Mr. Cartwright, he must have told the truth — that there' 
was a deficit amounting to one-third of the interest on the public debt, that 
there was a deficient harvest, and that the country was not as prosperous as 
it had been when he had negotiated his loan in 1875. At that time he 
had been able to give a very flourishing account of the country and of the 
use that had been made of the money borrowed by the Dominion. In a 
statement issued by him in London, on the 19th October, 1874, placing the 
condition of the Dominion before the capitalists of the world, Mr. Cartwright 
said : — " The whole of the debt has been incurred for legitimate objects of 
" public utility." * * * * " The indirect advantage from these pub- 
" lie works has already been found in the remarkable rapidity with which the 
" commerce and the material prosperity of the Dominion have been developed; 
" while a substantial increase in the direct returns may fairly be expected from 
" the improvements now in progress and to follow the steady progress of popu- 
lation and trade. * * * * The revenue has shown a continuous 
" surplus during each year since Confederation, in 1867, although it has in 
" the interval been charged with much heavy expenditure of an exceptional 
" kind, such as the outlay connected with the several Fenian attacks on the 
" country, the acquisition and organization of new territory, and providing an 
" adequate defensive force for the Dominion. * * * * The eight years 
" since Confederation, therefore, exhibit an aggregate surplus of Two Million 
" Four Hundred and Forty-three Thousand One Hundred and Eleven Pounds 
" (equal to Eleven Millions Eight Hundred and Eighty-nine Thousand Eight 
" Hundred and Eight Dollars, and not including the sinking fund) which has 
"been partially applied in the redemption of debt, and partially expend- 
" ed in new works. The annual oayment for sinking fund is included 
" in the current expenditure, and forms in the aggregate a further sum of 
" Seven Hundred Thousand Pounds (or Three Millions Four Hundred 
" and Six Thousand Six Hundred and Sixty-eight Dollars) since Confed- 
eration." When the last loan was negotiated, the Finance Minister 
was unable to say anything so encouraging, but had to admit the exist- 
ence of a deficit; and when asked what return he expected from the ex- 
penditure of former loans, he must have replied that an enormous amount was 
being expended in constructing a railway between Lake Superior and the Red 
River, through a country that was altogether unfit for settlement, and where 
the running of the road when finished would be attended with constant and 
very heavy loss. The lenders of money in England are very like those who 
lend money elsewhere. They are very apt to follow it and see what is being 
done with it. I venture to say there is not a year when a good many of those 
from whom we borrow, or their representatives, do not come to this country 
to see what we are doing with the money they have loaned to us. They will 
learn of the Fort Francis folly, of the large capital being hopelessly sunk in 
the railway between Lake Superior and the Red River, of the amount 
lost and locked up in the unfortunate steel rails speculation, of the contract 
for the Georgian Bay Branch Railway, and of several other unwise expenditures, 
to say nothing of more equivocal transactions. While I do not blame the 
Finance Minister for the manner in which he saw fit to issue the loan, I do 



66 TARIFF AND LOAN. 

blame the Government for having brought the country to the condition in 
which it now is, and which compels us to borrow on such terms. I will state 
to the House what the terms really are on which the last loan was obtained. 
The loan, carrying interest from the first of November, was issued at Ninety- 
one. There was commission to the agents, One per cent. Then, by an 
extraordinary provision in the prospectus, the subscribers to the loan were 
allowed to deduct from the May instalment the six months' interest payable 
on the first of May. This was a remarkable condition. It was a direct pay- 
ment of interest out of capital. It would be difficult to conceive anything 
more objectionable from every point of view than this arrangement. It 
diminished the amount of capital which the country should receive for the 
loan; it was a direct payment of interest out of capital, and without being 
passed through the books in this country, as it ought to have been. The 
Minister of Finance did not call the attention of Parliament to it ; so that 
there was an absolute concealment from Parliament of a very important 
condition of the loan. It is unjustifiable that a portion of the principal 
should be withheld and applied to the payment of interest, as has been done 
in this case. The effect will be to mystify the Public Accounts, to conceal the 
true amount of the deficit on the thirtieth of June next ; and if this be done 
Parliament and the country will be misled as to the true state of the public 
finances by means which can only be characterised as a " cooking" of the 
Public Accounts. The loan was issued early in November last, at Ninety-one 
per cent, but carrying interest at Four per cent, per annum on the full 
amount of its face from the first day of November. It was payable as follows, 
viz.: — 



5 per cent, 
i5 " 


. on application ) gth 
on allotment J 


20 " 


on 31st January, 1877. 


20 •' 


on 27th March, 1877. 


20 " 


on 25th June, 1877. 


11 " 


on 25th July, 1877. 


9 " 


discount. 



ICO 

By the conditions of the loan the subscribers were allowed to withhold the 
six months' interest payable on 1st of May, out of the instalment due on 
25th of May, thus making it a payment of interest out of capital, and 
diminishing by the amount of such interest and sinking fund the principal 
sum to be received by the country from the loan. The deductions to be 
made are — 

Discount 9 per cent. 

Commission to agents 1 " 

Six months' interest due 1st May, withheld .... 2 " 

Sinking fund, agency, &c x / 2 " 

12^ per cent. 

The net proceeds, as nearly as can be ascertained, in the 
absence of precise information from the Government, 
would be, loan ^£2,500,000 sterling, equal to $12,166,666 

Less, for discount, for commission, for interest withheld out of 

capital, sinking fund, agency, &c, in all 12^ per cent. . . . 1,520,833 

$10,645,833 



TARIFF AND LOAN. 67 

To which will have to be added the amount received by the Government for 
interest upon the instalments of the loan paid in between November and May, 
but which I have not the means of ascertaining. I think it may be safely 
assumed, however, that the amount the country will receive will not exceed 
Ten Million Seven Hundred and Fifty Thousand Dollars ($10,750,000), 
while it will be paying interest, sinking fund, &c, upon the full face 
of the loan — Twelve Million One Hundred and Sixty-Six Thousand Six 
Hundred and Sixty-six Dollars ($12,166,666). The interest, sinking fund, 
&c, upon this sum will amount to about Six Hundred Thousand Dollars 
($600,000) a year, and be an additional charge of that amount upon the Con- 
solidated Revenue Fund, which will have to be provided by means of new 
and increased taxation. I will not detain the House any longer at this late 
hour ; but from what I have stated I think honorable gentlemen will agree 
with me that prudence in respect to the public expenditure is most necessary ; 
that there is an absolute and pressing necessity for the introduction of the 
retrenchment which the present Government promised, but has not given 
to the country. 



sipieieoe: 



ON STEEL RAILS DELIVERED IN THE SENATE, OTTAWA, ON FRIDAY. 

APRIL I3TH, 1877. 



Upon a motion of the Hon. Mr. Read, on the subject of the Steel Rails, 

Hon. Mr. Macpherson said : — I am not surprised that the Hon. Secretary 
of State should manifest considerable feeling on this subject, but he will have 
to hear a good deal more about the Steel Rails speculation. 

Hon. Mr. Scott — It was no speculation. 

Hon. Mr. Macpherson — It was a speculation, and a most unprofitable one 
to the country, however profitable it may have been to some individuals. 
The Government manifested very little discretion in purchasing 50,000 tons 
of rails so long before any of them will be required — in purchasing rails for 
550 miles of the Pacific Railway before one mile of it was located or sur- 
veyed. 

Hon. Mr. Scott — 10,000 tons went to the Intercolonial Railway. 

Hon. Mr. Macpherson — That was an after-thought. The money which 
was applied for the purchase of them has been charged to the Pacific Railway. 
That was just one of the evils proceeding from this kind of speculation. The 
Government, finding it had committed a great blunder, assigned 10,000 
tons of the rails to Railways in Nova Scotia and New Brunswick, involving an 
expenditure which would not otherwise have been incurred. If the Govern- 
ment Railways in the Maritime Provinces had remained in the hands of the 
Provincial authorities, does any one believe that 1 0,000 tons of steel rails 
would have been laid upon them ? 

Hon. Mr. Scott — Mr. Brydges reported that they were necessary. 

Hon. Mr. Macpherson — The rails had been bought, and when it was 
found they could not be used for the purpose for which they were purchased, 
they were diverted to the railways in the Maritime Provinces. Two years 
have passed since the Government purchased steel rails for 550 miles of the 
Pacific Railway, and yet not one mile of the road is in operation. The 
hon. Senator from Belleville (Mr. Read) has stated enough, with what was 
previously known, to render a committee of inquiry into this whole matter an 
absolute necessity. There is not time this session, but it should be under- 
taken as early as possible after the next meeting of Parliament. If there has 
been no partiality in the purchase and transportation of these steel rails, there 
has been a most unfortunate combination of circumstances calculated to 
excite suspicion against the Government, and it is necessary that the whole 
transaction should be cleared up. Cooper, Fairman and Co.'s name has 
again been brought before the notice of the House, now as agents for the 



STEEL RAILS. 69 

contractors, and they were, no doubt, interested in the contract for transport- 
ing the rails. A member of this House was one of the partners in that 
contract, The independence of Parliament Act does not reach this Chamber ; 
but the honorable Senator from Hamilton should read the opinions expressed 
by the Minister of Justice upon members of the Senate being in any way 
engaged in transactions with the Government. The House will remember 
the attacks that were made upon a member of the Senate who had to dis- 
charge the duties of an important office, and who was appointed to this 
Chamber for the purpose of giving information to the Senate and to 
the public with respect to the Intercolonial Railway. If the Minister 
of Justice censured that, what would he not have said if the gentle- 
man from Hamilton had had a lucrative contract with the Govern- 
ment, while holding a seat in this House ? I will now bring to the notice 
of the House the actual cost of this steel rail speculation, so far as I can 
ascertain it, though I have not by any means all the items before me. It is 
no easy matter to find the items ; some are in the Public Accounts, some 
in the report of the Minister of Public Works, and a large number, I apprehend, 
have not yet been brought into the accounts. The sum paid in England on 
account of the rails was Six Hundred Thousand Eight Hundred Pounds, equal 
to Two Million Nine Hundred and Twenty-three Thousand Nine Hundred 
Dollars : estimated freight to Montreal on 10,000 tons, Thirty Thousand 
Dollars ; making a total of Two Million Nine Hundred and Fifty-three 
Thousand Nine Hundred Dollars, as the cost of the rails delivered in 
Montreal ; the average cost per ton being Fifty-nine Dollars and Eight Cents. 
There was freight to Vancouver Island, Forty-eight Thousand Six Hundred 
and Sixty-six Dollars ;* inland transport charges and insurance, Two Hun- 
dred and Twenty-two Thousand Eight Hundred and Eighty-four Dollars. 
Then there is the interest on Two Millions Nine Hundred and Fifty-Three 
Thousand Nine Hundred Dollars at five per cent, for an average period of 
two years, amounting to Two Hundred and Ninety-five Thousand Three 
Hundred and Ninety Dollars. I estimate the time at two years because the 
average will be found to be a great deal more before the rails are used, though 
it is a little less to-day ; but before the cost ceases to bear^ interest, it will be 
twice that. The interest added to the other figures I have given, brings the 
total cost of these rails, at the present time, to Three Millions Five Hundred 
and Twenty Thousand Eight Hundred and Forty Dollars. Now, these 
figures are perfectly appalling. 

Hon. Mr. Dickie — How much is that per ton ? 

Hon. Mr. Macpherson — Seventy Dollars and Forty-one Cents per ton. 
And the country has this enormous quantity of steel rails deteriorating at a 
rate that I cannot and will not venture to estimate, but which I know will be 
most serious. I am informed by parties who last autumn purchased steel 
rails of the very best quality, from the best makers, that they were laid down 
at Montreal this spring at Thirty-six Dollars per ton. 

Hon. Mr. McLelan — I think the hon. gentleman must be in error. I 
notice the Government have paid at the rate of Forty-eight Dollars per ton 
this year for iron rails. 
" Hon. Mr. Macpherson — That is no proof that I am in error. 

Hon. Mr. Hope — Who agreed to lay down the best steel rails in Montreal 
at that rate ? 

* I have been given to understand that this item — although it is not so expressed in the 
a-eturn — is included in the amount of Six Hundred Thousand Nine Hundred Pounds paid in 
England. 



70 STEEL RAILS. 

Hon. Mr. Macpherson — One of the best makers in England. 
Hon. Mr. Scott said he was informed that the Great Western Railway 
Company, at the time the Government purchased the 50,000 tons, had paid 
Eleven Pounds sterling per ton. 

Hon. Mr. Macpherson — The honourable Senator from Toronto (Mr. 
McMaster) stated that last year — no doubt for the purpose of sustaining the 
Government in their great speculation. The Ebbw Vale Company is 
regarded as a first-class house, and they sold steel rails, deliverable at Pres- 
cott this spring, at Seven Pounds Fifteen Shillings (Thirty-seven Dollars and 
Seventy-one Cents) per ton. 

Hon. Mr. Scott — Iron rails ? 

Hon. Mr. Macpherson — No ; steel rails of the very best quality. 

Hon. Mr. Campbell- — Steel rails — I have seen the invoice. 

Hon. Mr. Macpherson — I allow One Dollar and Seventy-one Cents 
per 'ton for transport from Montreal to Prescott, and call the cost of the 
rails at Montreal Thirty-six Dollars per ton. 

Hon. Mr. McLelan said this same company had furnished steel rails for 
the Intercolonial Railway, and they were the very best that had been laid on 
that road. 

Hon. Mr. Scott — The company went into liquidation not long ago. 

Hon. Mr. Macpherson — They changed from a partnership to a corpora- 
tion ; but the company is one of the largest in England. At no time have 
they fewer than 7,000 persons in their employment, and no ironmasters in 
England have a better reputation for furnishing rails of the very best quality 
than this same company. 

Hon. Mr. Scott — But their rails are not all of the same quality and 
pattern ? 

Hon. Mr. Macpherson — The quality of the purchase I refer to was 
warranted to be the very best. Now, the 50,000 tons purchased by 
the Government cost Two Million Nine Hundred and Fifty-three Thou- 
sand Nine Hundred Dollars; but if they had waited until the present 
time — and, even now, they only require a small quantity — the rails 
could have been bought and delivered at Montreal for OneMillion Eight 
Hundred Thousand Dollars, showing a loss to the country by the specu- 
lation — by the purchase prematurely and imprudently made by the Govern- 
ment — amounting to One Million One Hundred and Fifty-three Thou- 
sand Dollars. Adding to this the interest, Two Hundred and Ninety -five 
Thousand Three Hundred Dollars, and freight to. Vancouver Island, Forty- 
eight Thousand Six Hundred and Sixty-six Dollars, the actual loss to-day 
will be found to reach One Million Four Hundred and Ninety-seven Thou- 
sand Eight Hundred and Sixty-six Dollars, or say One Million and a Half of 
Dollars. In addition to this, there is the inland freight and insurance, 
amounting to Two Hundred and Twenty-two Thousand Eight Hundred and 
Eighty-four Dollars, which was paid before the rails were wanted. This 
enormous blunder would be a lasting charge upon the consolidated revenue 
fund of Seventy-five Thousand Dollars a year, at least. 

In addition to all this, I understand there is a small army of care- 
takers and laborers employed about the rails, and the rails are deteriorat- 
ing every day. Altogether, it is a most serious affair. The proper course for 
the Government to have pursued would have been to wait until the rails were 
required, and then to buy them at the market price, whatever it might be. 
As a matter of fact, had they done this they would have saved One and a 
half Millions of Dollars to the country. The present Government do not 
pretend to be more than simple administrators, because they have over and 



STEEL RAILS. 71 

over again declared that they could not introduce any new legislation to 
benefit the country in its present state of great depression. In other words, 
there is nothing in the science of government known to them by which they 
can by legislation assist the industries and promote the progress of the 
country. From the information which is being gained from day to day, the 
steel rail transaction, I fear, is a fair average specimen of the administration 
of the Government. 



MEMORANDUM, SUPPLEMENTAL TO THE FOREGOING 

SPEECH. 

It is difficult, I repeat, to obtain the information necessary to prepare a 
strictly accurate account of the Steel Rails transaction. The details have 
to be extracted from several sources, and they are not always given 
explicitly. Any statement of loss prepared now can, of course, only be 
approximate ; but the ultimate actual loss is pretty certain to exceed any 
estimate of it that has been presented. The expenditure for Steel Rails and 
fastenings as nearly as I can ascertain is as follows : — 

Paid in England, for 50,000 tons of Steel Rails, as per Parlia- 
mentary return, ^600,800, (including freight to Canada 
of 40,000 tons, and to Vancouver Island of 5,000 tons). . $2,923,900 

The freight to Canada on the remaining 5,000 tons, I estimate 

at 1 5,000 



$2,938,900 
Paid on account of inland transport charges, insurance, &c. .. 222,884 

Interest on ascertained payments to 30th June, 1877 271,365 



$3>433> I 49 



Including inland freight, labour and other charges, which must have been 
paid since 1st July, 1876, but of which we have not the accounts, the total 
amount disbursed by the Government must exceed Three Millions Five 
Hundred Thousand Dollars ! 

Interest is properly chargeable on all disbursements for materials from the 
date of payment until they are used in the Railway. I apprehend interest 
will thus be chargeable on the whole outlay in connection with the steel rail 
purchase for an average period of four years at least, which, on the amount 
at present known to have been paid out, will amount to Six Hundred and 
Ninety Thousand Five Hundred and Thirty-four Dollars. 



The Profit and Loss Account of the Government steel rail speculation 
may be taken to stand about as follows, viz. : — 

Cash paid in England for steel rails and fastenings $2,938,900 

The same quantity could have been purchased, deliverable 

this Spring in Canada, for 1,800,000 

Loss on first cost $1,138,900 



72 STEEL RAILS. 

Interest to 30th June, 1877, on ascertained payments 271,365 

To this must be added the cost of 4,000 tons laid upon the 
Truro and Pictou Railway, a line that would not have 

been steeled had not the rails been on hand 235,120 

(The Government has taken authority to transfer this Railway 
to Nova Scotia as a gift to a private Company.) 



Ascertained loss to the end of current fiscal year, 30th June, 1877 $1,645,385 



Interest is running on at the rate of about $13,500 per month 
and is increasing — I estimate the further loss by interest 
before the rails are used at $419,169 

It may be assumed that the country's loss by this unfortunate transaction, 
before the interest account can be fairly closed, will not be less than 
Two Millions of Dollars ! 

The Rails have been distributed as follows : — 
5,000 tons to Vancouver Island, where they are not required. 
11,000 tons to Nova Scotia, 4,000 tons of which are to be given away to a 

private Company. 
And the remainder are at various places from Kingston to Manitoba. 



S Jbr* _EC _Ej C -EB- 



ON HARBOUR IMPROVEMENTS. — DELIVERED IN THE SENATE, OTTAWA, ON 
TUESDAY, MARCH 13TH, 1 87 7. 



Hon. Mr. Macpherson said : — I beg to move that an humble address be 
presented to His Excellency the Governor General, praying that he will be 
pleased to lay before this House copies of the reports and estimates of the 
engineer upon the works proposed to be performed at the following ports or 
localities, namely : — 



Arisaig N. S. 

Annapolis N. S. 

Baxter's Harbour N. S. 

Bayfield N. S. 

Beach Point P. E. I. 

Beaver Cove N. S. 

Bedeque P. E. I. 

Canada Creek N. S. 

Chipman's Brook N. S. 

Cape Traverse P. E. I. 

Christmas Island N. S. 

Cove Head P. E. I. 

Grand Manan N.B. 

Hopewell N.B. 

Hall's Harbour N. S. 

Liverpool N. S. 

Lingan N. S. 



Lingan Beach N. S. 

Musquodoboit N. S. 

Malpeque P. E. I. 

Montague River P. E. I. 

Nail Pond to Egmond Bay P. E. I. 

North Sydney N. S. 

Port Gilbert N. S. 

Pubnico N. S. 

Port Hood N.S. 

Richibucto N.B. 

St. Peter's Bay...; P. E. I, 

Scott's Bay N.S. 

Truro N. S. 

Victoria Harbour N.S. 

West Arichat N.S. 

Walton N.S. 

West Sandy Cove N. S. 



I have given notice 
of thirty-four harbours 



of this motion in consequence of seeing 
which have been surveyed, and of which 



this list 
reports, 
Works, 
number 
Public 
I take 



plans and estimates have been sent to the Department of Public 
I confess that I feel a good deal of alarm at seeing so great a 
of new sites for harbours being reported on by order of the 
Works Department. Harbours are necessarily costly works, and 
it for granted, in the present case, that some of those proposed are 
mere inlets, to which little trade has resorted heretofore. The cost of im- 
proving these harbours will be followed by the establishment of custom houses, 
light houses, fog horns, and other expenses necessarily attached to harbour 
service. Considering that works of this kind are paid for out of revenue, and 
seeing that the revenue shows a deficit, I cannot understand how the Govern- 



74 HARBOUK IMPROVEMENTS. 

ment can encourage gentlemen interested, or the localities interested, with 
hopes that public money can be expended on new works of this kind at 
present. The surveys were ordered last year, although it was well known to 
the Government then that the revenue would show a deficit ; and in my opinion 
the action of the Government in ordering the surveys and plans for these new 
works at that time was most reprehensible. It is the duty of the Government 
to resist the pressure which is brought to bear to force them into entering 
upon large and new expenditures, in the circumstances of the country. If ever 
there was a Government which should be able to resist such pressure it is the 
present Administration, as they not only have a large majority at their back, 
but they came into power pledged to economy and retrenchment. The surveys 
alone of new works in 1876 amounted to Forty-Four Thousand Three Hundred 
and Thirty-Three Dollars.* 



* In reply it was stated by the leader of the Government, in the Senate, that four only 
of these Harbours would be improved this year. The survey of so many more than can be 
required in the public interest was exceedingly blameworthy in the Government. The 
examination of an inlet and a favourable report upon it, by a Government Engineer, is 
accepted by the people of a locality as a promise of public expenditure, a pledge for a Harbour 
with all its expensive establishments, from a light-house to a landing-waiter. I fear many of 
these thirty-four Harbours, and sites for Harbours, were surveyed solely to appease exacting 
Parliamentary supporters. It would seem that under the leadership of Mr. Mackenzie 
an overwhelming Parliamentary majority instead of conferring strength and independence 
upon the Ministry, insuring pure and able administration, is a source of weakness to them, 
producing selfishness and demoralization among their followers, and leading, it is to be feared, 
to much reckless and corrupt expenditure of the people's money. 

Now that the self styled party of Reform, Purity and Economy is charged with the 
Government of the country, instead of being guided by the considerations of patriotism, self- 
denial and self-respect which, from the professions of its members, it was expected would 
govern them, they really appear to be kept together by no higher motive than that which 
bands politicians of the baser sort, and which by our neighbours is felicitiously called 
" the cohesive power of public plunder." 



s ip ie :e c ih: 



ON THE BILL RELATING TO THE VIOLATIONS OF THE INDEPENDENCE OF 

PARLIAMENT ACT DELIVERED IN THE SENATE, OTTAWA, FRIDAY, 

APRIL 27TH, 1877. 



I will give my reasons for objecting to the Bill in its present shape. If it 
had been made a condition precedent to taking advantage of the provisions 
of the measure, that gentlemen should vacate their seats, I should be 
willing to relieve them from the penalties they have incurred. There is, 
however, a very wide distinction to be drawn between some of the alleged 
cases and others. Those members of the House of Commons who have 
unintentionally and unwittingly violated the letter of the Act through the 
action of a partner or clerk; by selling a small quantity of merchandise to an 
official of the Government, perhaps not knowing or suspecting at the 
time that the purchaser was an official, or that the purchase was 
for the Government ; or by printing a Government advertisement in 
a newspaper, occupy a very different position from those who know- 
ingly offended. It is alleged that gentlemen occupying the highest 
positions in the other House, and in the country, hold contracts with the 
Government, some of them being, it is alleged, Cabinet Ministers. There 
is a vast difference between these, who, from the positions they hold, are able 
to enrich themselves at the expense of the country by many thousands of 
dollars, and the men who have unknowingly violated the letter of the Inde- 
pendence of Parliament Act. I maintain that the Senate should not relieve, 
in any way whatever, those who are guilty knowingly and corruptly. If it 
be true, as is alleged, that high officials are Government contractors, drawing 
large sums of money from the public treasury, under contracts which it may be 
said they made with themselves, they are guilty of most scandalous conduct, 
and I contend Parliament should not relieve them of the legal penalties which 
attach to their conduct. As I do not see that on this the last day of the 
session the Bill can be amended in such a way as to relieve the innocent and 
leave the guilty to punishment, I shall be obliged to record my vote against 
the Bill. 



CHANGE OF OFFICES AT OTTAWA. 



N. B. — While these sheets have been passing through the press an 
unexpected shuffle of Cabinet offices has taken place at Ottawa, viz. : 
Mr. Laflamme to be Minister of Justice, vice Mr. Blake, who has become 
President of the Council, vice Mr. Cauchon, who has become Minister of 
Internal Revenue, vice Mr. Laflamme. This exchange of portfolios cannot 
fail, for obvious reasons, to be deeply disappointing to the people of nearly 
the whole Dominion. In Ontario, I think, it is calculated to produce positive 
uneasiness, as indicating that the influence of Messrs. Mackenzie and Blake 
in the Government is on the wane — the influence of the two Ministers in 
whom the friends of the Government in this Province placed their sole 
reliance. The changes are too important to permit it to be supposed that 
they are wholly due to the convenience, or choice, or ambition, of individual 
Ministers. I shall not impute to Mr. Blake the taking from personal 
motives only of a step which he must have known would derogate very 
seriously from the character and dignity of the present Government. If the 
labor of Mr. Blake's late office was more than he could perform without 
imperilling his health, he might have appointed additional assistants, and in 
that way have made his own work comparatively light and easy. It would 
have been better in the interest of the country if Mr. Blake had done this 
instead of exchanging an exalted office for one of little or no responsi- 
bility — a mere sinecure. The Minister of Justice is charged with higher 
moral responsibilities than any other Minister of the Crown in Canada. 
Upon him devolves the maintaining, and when necessary the amending, of 
our commercial and criminal law; to him Parliament looks for guidance in 
its deliberations on all Constitutional and Legal questions : upon his recom- 
mendation all the Judges of the Dominion are appointed ; and it is upon his 
advice that the highest prerogative — the prerogative of mercy — is exercised 
by the Crown. 

It is this office, with all its important and lofty attributes, that Mr. Blake 
has vacated in favour of Mr. Laflamme — an act which has filled the minds of 
the people of Ontario with amazement. No one desires that Mr. Blake 
should overtask his strength in the public service; but it is difficult to believe 
that he could not have assigned much of the toil of his late office to com- 
petent assistants. While he has divested himself technically of the responsi- 



CHANGE OF OFFICES AT OTTAWA. 77" 

bility of the Ministry of Justice, Mr. Blake must be perfectly well aware that 
the people, especially the people of Ontario, will not be willing under all the 
circumstances to relieve him of moral responsibility to them for the adminis- 
trative acts of his successor, Mr. Laflamme, for whose appointment Mr. 
Blake must be held responsible. 

Toronto, June, 1877. 







i